The future of thousands of skilled workers at Falmouth Docks has been safeguarded thanks to a five year £53 million Ministry of Defence contract.

The multi-million pound MoD deal with A&P for the long term maintenance of five Royal Fleet Auxiliary ships has given the company and the town a huge boost.

The vote of confidence by the MoD means jobs should be secure at the site and has confirmed its importance as a major ship repair yard.

Defence Minister Baroness Taylor announced on Monday that A&P Group, which also has a yard in Newcastle-upon-Tyne, will be one of the contractors maintaining the flotilla of Royal Fleet Auxiliary tankers, stores ships and landing ships that supply the Royal Navy at sea.

The ships, described as the Royal Navy's "supermarkets at sea" supply everything needed during operations and act as medical support ships.

The yard will look after all aspects of maintenance on the RFA Argus and the "cluster" of amphibious ships, The RFA Cardigan Bay, the RFA Largs Bay, the RFA Lyme Bay and the RFA Mounts Bay.

This means providing the necessary refuelling and refit work throughout their service lives.

Managing director of A&P Falmouth Ltd, Peter Child, said: "We have got 500 people employed in the yard and overall there are 1,000 people in the docks.

"Over 80 per cent, 800 people, are skilled and it is really important for the docks that this sort of contract comes in."

The contract is expected to guarantee 25 per cent of A&P's turnover over the next 30 years.

Mr Child said: "It is great news for Falmouth as there are another 1,500 jobs that depend on the dock in Falmouth and Penryn.

"So 2,500 jobs not quite guaranteed but definitely safeguarded for the future."

Mr Childs added subject to performance targets, the rolling contract would be extended in five yearly increments to potentially thirty years, giving the yard stability and the ability to invest and plan for the future.

Commodore Jamie Miller, the Royal Navy regional commander for Wales and Western England, said: "To an operational commander at sea the Royal Fleet Auxiliary is the life blood of the work carried out."

He added the new contracts mean A&P and the Navy are now very much part of the same family and this would help ensure these vital ships are in excellent fighting condition.

Falmouth Mayor Mike Varney said: "It is fantastic news for Falmouth and in some respects will secure jobs in the town.

He added the news came at a particularly good time as following the credit crunch people were looking over their shoulders.

He added: "What we have to do now is continue to support what is one of, if not the, largest employers in the community."

Read David Barnicoat's views In Port page 8 and comment on this story at thepacket.co.uk