As opposition parties demand immediate action, the government has announced the formation of a task force to tackle the crisis.

Sir Gavin Laird, former General Secretary of the AEEU union, heads the taskforce, which visited the shipbuilding yard at Govan. Kvaerner employs 1,200 people there, while another 700 people work at the turbine plant in Clydebank.

His group will employ consultants to identify potential buyers and advise on terms of sale.

'Committed' search

Sir Gavin said: "The members of the taskforce are committed to finding new owners who will retain employment and keep the businesses viable.

"We will be working flat out to achieve this aim."

Scottish Industry Minister Lord Macdonald is pointing out that Govan has attracted subsidies of £90m - and that the Norwegian group recently rejected another aid package of £8m.

He said: "It is my view that both the Govan shipyard and Clydebank engineering operations can be viable businesses with considerable potential under new ownership.

"The challenge now is for all concerned to focus on the shared goal of ensuring a productive future for the workforces of Kvaerner in Scotland."

Redundancies soon

BBC Scotland's political correspondent Kenny MacIntyre says several hundred redundancies will be confirmed shortly and that the workers' fate will become a big election issue.

Opposition parties seeking places at Holyrood say the problems on the Clyde point up weaknesses in the Scottish economy.

The Scottish National Party's deputy leader John Swinney said the government must invest money and help secure the jobs.

The Liberal Democrats leader Jim Wallace insisted te government must explore "every avenue". He also argued that it would not benefit anyone for Kvaerner to become "an election football".

Scottish Conservatives leader David McLetchie said it was "a grim day" for Govan and the sale announcement threatened further job losses under Labour.

Tommy Sheridan, from the Scottish Socialist Party, says the "for sale" sign hanging over the Govan yard is proof that the shipbuilding industry should be nationalised.

Labour currently holds the Govan constituency - the MP is Mohammad Sarwar, who was recently on trial over allegations relating to his election in May, 1997.

In previous elections, the SNP has twice captured the seat from Labour. The issue of the yard's future is likely to be high on the political agenda locally as campaigning continues up to the 6 May vote.

Fall-out threat

Union leaders are also demanding action.

GMB Scotland has warned of a major jobs crisis in the heavy manufacturing industry of the west of Scotland.

As well as the Kvaerner announcement, the union pointed to a further 3,000 job losses at other engineering unions in the area.

The union's industrial officer for engineering, Jim Moohan, said: "Kvaerner, together with the government, unions and local enterprise companies, really must do all in their powers to prevent the closure."

"As we have seen at Ravenscraig and Clydesdale, once skilled manufacturing jobs are lost, they are gone forever."

Scottish regional secretary of the Amalgamated Engineering and Electrical Union, Danny Carrigan, said: "Although we expected bad news, confirmation has brought doom and gloom and despondency to the Clyde.

"We need to scour the world and bring forward Ministry of Defence orders to make Govan a viable concern for a potential buyer."

The same union's General Secretary, Ken Jackson, said it was much cheaper to build ships elsewhere and British yards had lost out.