ENGINEERING firm BiFab has confirmed staff face potential redundancy after union leaders warned hundreds of jobs were at risk.

Unite said yards in Fife and Arnish on Lewis are in line for possible closure – with some 260 jobs to go by early summer.

In a statement, BiFab said its senior management were continuing to do “everything possible to avoid redundancies within the business”.

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But it warned it was now critical new contracts were secured to support jobs after its current projects come to an end in June.

The firm said it was going though a “natural down-manning process” as it nears the end of its work on the £2.6bn Beatrice Offshore Windfarm.

BiFab said it had notified the Scottish Government of “potential redundancies to permanent staff”, but insisted this was “part of the collective consultation process to inform staff about potential planned redundancies and not a decision that redundancies will take place”.

It said: “A number of target projects remain under tender – both within the Renewables and Oil & Gas sectors, where further discussions continue in hope to secure further work across each of the BiFab sites and maintain continuity of employment in the business beyond the Beatrice Offshore Windfarm project.

“It is not under estimated that the timing of securing those projects is now critical as work is coming to an end of existing work, which is scheduled to be complete by June of this year.”

BiFab was bailed out by a £15 million Scottish Government loan just months ago, and had been facing a fresh threat to its survival after being hit with a multi-million pound lawsuit.

November’s rescue package allowed the firm to continue trading through to the completion of the Beatrice project.

Unite's regional officer Bob McGregor previously warned the closure of yards will turn the areas affected "into an industrial graveyard".