Plans to dismantle nuclear submarines at the Nigg fabrication yard in the Highlands have been dropped.
More nuclear subs are coming to the end of their lives
The yard's owners, Kellogg Brown Root, have withdrawn from a consortium bidding for the contract from the Ministry of Defence (MoD).
The company said the work was of a relatively short-term nature and offered little prospect of longer-term job creation.
The decision has been welcomed by local politicians and comes as the Scottish Parliament debates how the seven nuclear submarines lying idle at Rosyth in Fife should be disposed of.
The Easter Ross yard would have been used to break up the submarines before reactor cores were shipped to Vulcan, the Royal Navy's test facility near Dounreay.
The Liberal Democrat MP for Caithness, Sutherland and Easter Ross, John Thurso, commended Kellogg Brown Root for ending the uncertainty in the area and making the decision promptly.
Several consortia are in the running to win the contract to remove the nuclear reactors from the seven subs at Rosyth and another four at Devonport.
The MoD is expected to make a decision on the bids by August 2005 and start the new storage procedures in August 2006.
There is concern is that more of the 16 nuclear submarines still at sea are coming to the end of their lives and by 2012 there will be no mooring space left.