Appledore had employed 550 staff before problems with orders

Appledore Shipyard had been selected as the preferred bidder for the Scottish Fisheries Protection Agency vessel, which could have saved the jobs.

But the tender has been terminated because of concerns that it did not comply with EU regulations.

The yard has struggled to find new work since it was taken over by DML in 2004.

Yacht moved

The Scottish Executive had to stop the tendering process for the fisheries patrol vessel following concerns the procedure broke EU rules.

The executive said the tender process would begin again, but that could take up to nine months.

Workers are Appledore said several contracts were in the pipeline and they were still hopeful redundancies can be avoided. DML said it was seeking a full explanation.

Appledore Shipbuilders was founded in the 1850s. It was taken over by DML, the firm which runs Plymouth's Devonport Dockyard, in 2004 after the 20-acre (eight hectare) yard went into receivership in 2003 because of a downturn in orders.

Before its problems, it had employed 550 people.

A new yacht hull built at Appledore has just been transferred to Devonport for completion.