MORE than 1000 jobs at the troubled BiFab engineering firm could be saved despite warnings of mass redundancies, a union leader has claimed.

BiFab is back under threat just months after Nicola Sturgeon unveiled a rescue package to prevent its collapse.

However, GMB Scotland secretary Gary Smith insisted there was still “all to play for”.

A failure to act would be "catastrophic" for the industry, Smith warned ministers ahead of crunch talks on Tuesday.

Redundancy notices were issued to Bi-Fab workers at yards in Fife and Arnish on the Isle of Lewis last week.

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

The jobs of the 260 permanent workforce are at stake, it was reported.

Nearly 1,200 agency staff and contractors would also lose their work if BiFab went bust.

The fresh threat to BiFab came after the firm was bailed out by a £15 million Scottish Government loan last November.

The bail-out followed worker occupations at the firm's yards in Fife and Lewis that month.

BiFab had faced the threat of administration over cashflow problems.

Smith said the rescue package announced last November was a "temporary reprieve".

He said that in the wake of a new concerns about BiFab, ministers had to step in again to save jobs.

The GMB and the Unite union are to hold talks over BiFab with Scotland's economy secretary Keith Brown on Tuesday.

However, Smith said he was "110 per cent convinced" that the BiFab jobs could be saved. "We are still in the game and there is all to play for. We always knew it would be a rollercoaster," he added.

Smith said there were other potential wind farm contracts that BiFab was well placed to win.

Smith said the collapse of BiFab would be a devastating blow to the renewables industry, which ministers heavily promote.

He said: "The Scottish Government has put a huge amount of political capital into BiFab and there is a great deal of goodwill towards the workforce.

"It would be absolutely catastrophic and would cause Scotland real reputational damage if it was to be allowed to go under.

"The reputation of the renewables industry would be in tatters. The Scottish Government has got to put leverage into this as its credibility is on the line here."

Smith added: "There's a danger of an over reaction to what is a technical process.

"We knew that the contract was going to expire and that there would be a process for redundancies.

"They've initiated a consultation on job losses. It's technical stuff and doesn't signal the end."

BiFab said it had notified the Scottish Government of “potential redundancies to permanent staff”.

In a statement, it 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”.

Last night, a Scottish Government spokeswoman said ministers would help BiFab to attract investment to keep it afloat.

The government spokeswoman said: “Scotland has an established reputation as a renewable energy powerhouse.

"Our low carbon and renewables sectors support thousands of jobs across Scotland. Scottish Ministers continue to offer support to BiFab to allow work to continue on the contracts for the Beatrice offshore wind farm.

"The loan facility extended by Scottish Ministers will see BiFab receive payments on commercial terms, to alleviate immediate cash flow issues experienced by the company in connection with the Beatrice project.

“Ministers recognise this remains a difficult period for BiFab’s workforce and their families, and for BiFab’s contractors and creditors.

"Ministers recognise work remains to be done to secure the long term future of the company and welcome the commitment made by stakeholders to achieving that outcome. Ministers will continue to offer support to attract long term investment in this vital sector of the Scottish supply chain and economy.”