Substantial redundancies at Harland & Wolff are likely and the future of the troubled Belfast shipyard is at risk, its managers warned yesterday.

The company has already made 280 workers redundant this year, leaving a staff of 1,000. A further 250 people are employed in companies dependent on the shipyard.

Harland & Wolff has been unable to finalise two contracts since completing work on a rigship for a US group, Global Marine, last month.

Fred Olsen Energy, the Norwegian company that owns 70.1 per cent of the yard, blamed Global Marine's failure to pay a £23 million sterling (€38 million) delivery instalment for the GloMar Jack Ryan for placing the yard's future at risk.

This element of the £300 million contract is subject to arbitration. Global Marine disputes that the price demanded by Harland & Wolff was fair and questions whether the ship was ready for delivery on July 24th, ahead of the scheduled completion date in the contract, July 31st.

A separate payment of $133 million for "additional work" Harland & Wolff claims it carried out is also subject to arbitration. In a brief statement to the Oslo stock exchange, Fred Olsen said: "The absence of money due on completed contracts and the uncertain order book position has placed the very future of the yard at risk."

While adding that managers were seeking alternative business, it said: "Given the current circumstances, any proposal will inevitably involve a substantial reduction in employees."

The company had yet to specify how many jobs are at risk, its spokesman claimed.

Earlier, Harland & Wolff cancelled a proposed meeting with its trade unions. Mr Bobby Carson, president of the confederation of shipbuilding and engineering unions, said he anticipated meeting management early next week.

Mr Carson said he was not surprised by yesterday's development. Referring to the statement he said: "It doesn't rule anything out and doesn't rule anything in. Obviously that gives us grave concern. We would hope that the decision, when they arrive at it, will mean a future for shipbuilding at the Belfast yard."

He added: "It still doesn't specify the extent to which the difficulty exists. The uncertainty continues, as does the intense stress and strain that this is causing the workers and their families."

The MP for East Belfast, Mr Peter Robinson, was unavailable yesterday for comment. His Democratic Unionist Party colleague Mr Sammy Wilson MLA said efforts should be made to obtain short-term work "which will, at least, keep a core of the workforce together".

The SDLP's Enterprise, Trade and Investment spokesman, Mr Alasdair McDonnell, said the likely job losses were very regrettable. There was an "immense responsibility" to secure alternative employment for the workforce, he said.

Sir Reg Empey, the Minister of Enterprise, Trade and Investment is in the US on a trade mission and was unavailable for comment.