The award of a multi-billion pound defence contract has been hailed as a "great day" for Scotland's beleaguered shipbuilding industry.

Scottish Secretary Helen Liddell told BAE Systems staff that the �2.9bn contract would trigger the "rebirth of the Clyde".

And Chancellor Gordon Brown said the contract was "great news" for Babcock's dockyard at Rosyth, in Fife, which will assemble the two new aircraft carriers after they have been built elsewhere.

Shipyard workers, who had gathered at BAE Systems sites in Glasgow, cheered the news that they will have a lead role in the deal.

The Clyde yards will benefit from the deal

The aircraft carrier contract, in an alliance with French defence giant Thales, will be worth up to �10bn when maintenance and support work is added.

The Govan and Scotstoun yards in Glasgow will manufacture the ships' three megablocks and the parts will be assembled at the Rosyth dockyard.

The two 950ft long, 60,000 tonne carriers will be the biggest British warships ever built.

The Amicus union welcomed the decision, saying the decision to make BAE Systems the lead contractor was great news for Scottish shipbuilding.

Manufacturing sector

"This is the biggest decision that the MoD have taken in decades and is a much needed shot in the arm for Scottish shipbuilding and the wider manufacturing sector," said John Quigley, Scottish regional secretary for Amicus.

Govan yard union convenor Jamie Webster said the news "was like a fairytale" to everyone involved in the industry and their families.

Mrs Liddell said "This is a great day for the Clyde.

"This contract will create good quality jobs for many years to come."

Dunfermline East MP Gordon Brown offered his congratulations to the workforce at Rosyth.

Mr Brown, who is due to visit Rosyth on Friday, said it was "great news" for the yard, for Fife and the whole of Scotland.

This is the biggest decision that the MoD have taken in decades and is a much needed shot in the arm for Scottish shipbuilding. John Quigley Amicus

Enterprise Minister Iain Gray claimed the order had secured the future of Scottish shipbuilding and safeguarded thousands of jobs both on the Clyde and at Rosyth.

"These new contracts, which build on the work of the Clydeside Ship Yards Task Force Report, will ensure that shipbuilding in Scotland can flourish."

Ron Culley, chief executive of Scottish Enterprise Glasgow and chairman of the Scottish Executive-appointed Clyde Shipyard task force, also welcomed the move.

He said that the Clyde could expect a future flow of work that will secure shipyard employment for many years to come.

"It has been some time since such a claim could be made," he said.