The first £35m contracts paving the way for the start of work on the Royal Navy's two future aircraft carriers was awarded yesterday at Rosyth dockyard in Fife, ending speculation that the £3.8bn ships might be postponed or cancelled.

Delays in placing definite preparatory orders for the 65,000-tonne warships had led to growing concern among shipyard owners and unions that pressure on the overstretched defence budget might force a switch in military priorities and lead to thousands of job cuts across the UK.

Another £15m is to be invested in other vital improvements at Rosyth, including the installation of a Goliath, one of the few cranes in the world capable of lifting the huge ship sections to allow them to be welded together.

Babcock Marine awarded the first major contract to Edmund Nuttall Ltd, the construction firm whose job will be to modify Rosyth's huge drydock where HMS Queen Elizabeth and HMS Prince of Wales will take shape from huge modular hull sections over the next six years.

These will be built in yards on the Clyde, at Portsmouth and at Barrow-in-Furness before being towed to the Rosyth assembly point on the Forth in one of the largest operations of its kind ever undertaken.

Willie Rennie, the LibDem MP for Dunfermline and West Fife and a member of the Commons Defence Select Committee, said the announcement of the drydock contract would give "great confidence to the Rosyth workforce" that the project was at last under way.

"It will be a great day when these carriers are finally commissioned and sail down the Forth," he added.

The ships, three times the size of the current Invincible class, are provisionally due to enter service in 2014 and 2016 as the centrepiece of Britain's capability to project military power across the globe.

Building the hull sections and outfitting the vessels will provide work for about 10,000 people, including 3500 at the two Clyde yards and 1600 at Rosyth at the project's peak.

Des Browne, who doubles as Defence and Scottish Secretary, attended the landmark contract signing ceremony. He said: "This is a significant investment for shipbuilding in Rosyth and symbol of our commitment to the new carriers, which will be the largest ships ever sailed by the Royal Navy."

Peter Rogers, the chief executive of Babcock International Group, said the award of the contract represented the culmination of a great deal of hard work by all of the companies and groups involved in the UK's Aircraft Carrier Alliance.

Despite a renewed government promise last July that the project would go ahead, behind-the-scenes delays over funding and negotiations over a Whitehall-driven defence industrial strategy aimed at rationalising British shipbuilding for the longer term had led to doubts in both industrial and military circles.

The MoD's fragmented and much-criticised procurement policy means that bills for several large projects including the carriers will all fall due simultaneously within a limited timespan from 2012 onwards.

One naval officer told The Herald: "The RN has mortgaged its future on these ships. But we were fairly confident they would eventually be built, since Rosyth is next door to Prime Minister Gordon Brown's constituency."


Video: Featuring Des Browne