Westminster Editor James Cusick travelled to Grimsby, near the Lindsey oil refinery, to see for himself the effect of last week�s strikes. He found a town backing the striking workers but fearful of what might happen next

Drive 10 minutes from the fish dock in Grimsby where 100 Italian and Portuguese construction workers are billeted in a floating "hotel" barge, and there is evidence of a growing fear of what happens next. The foreign workers were the focus last week of nationwide wildcat strikes which saw 5000 protesters gather outside Britain's main oil refineries to complain that their "British" jobs were being given away. Tomorrow, when the protests are expected to resume, residents in Grimsby and nearby Cleethorpes fear that north Lincolnshire could become what one local hotelier called "the front line of the battle for Britain".

Tucked away in a corner of Grimsby's vast fish docks, berthed among the decaying Victorian buildings and warehouses that a half century ago could claim to be the world's largest and busiest fishing port, the barge hotel looked quiet. Asked if they could speak English and wanted to answer a few questions, the few workers who stood outside on the balconies of the three-storey barge shouted back "No". A few gestured not to have their pictures taken.

Their numbers are about to increase over the course of this month when another 300, mostly Portuguese workers, will be brought in to advance construction work on a new desulphurisation unit at the Total oil refinery along the M180 near Immingham. Two other barge hostels, according to one docks' official, are said to be "on their way" to accommodate the new additions to the workforce.

Yesterday, everything was quiet outside the Total refinery, with the security guards evidently pleased at the weekend break from three days of protests that saw the demonstrations in Lincolnshire being joined by co-ordinated protests and unofficial stoppages at refineries and power plants throughout England, and in Scotland, Wales and Northern Ireland.

But the lull won't last. Tomorrow morning at the Lindsey refinery and at other sites throughout the UK, "British jobs for British workers" will once again be the message on the placards of the demonstrators.

For Bob Callison the coming few weeks are worrying. Along with his wife he owns and runs the Adelaide Hotel, a low-cost bed-and-breakfast guesthouse on Isaacs Hill in Cleethorpes. The street, which reaches up into the centre of Cleethorpes and then down towards the seaside promenade and the old pier, is usually full of contract workers in the winter months.

Adjoining Grimsby doesn't have many guesthouses. If you're a contract worker at the Lindsey refinery, travelling there from Glasgow, Newcastle, Leeds, Manchester or even from Ireland, the chances are that your "digs" are on Isaacs Hill. But this is not the case if you are from Italy or Portugal.

"Ten, maybe 15 years ago, I can recall 3000 contract workers arriving on coaches in Cleethorpes, all of them looking for rooms, a bed," says Callison. "It's the lifeblood of this place.

"Tourism has long since declined and the money contractors bring in, what they spend in restaurants, the newspaper shops, in small hotels, anywhere, keeps us all going."

He adds: "The 300 or 400 European workers, all locked up and fed and ferried to Immingham, are taking money away from local hoteliers, sure.

"But the bigger picture is frightening. They are taking jobs away from people who live here, need these jobs, want these jobs. And if the EU say these are the rules, then change the rules."

Callison understands the European Union's laws governing labour markets and free access for all EU member states. He understands them; but he doesn't agree with them. "The tendering process, which allowed foreign firms to bid for this work, should be scrapped. British firms should promise they'll employ British workers."

Callison, who is currently the chairman of the North East Lincolnshire Inspected Accommodation Group, adds "National statistics say this region is the cheapest place to stay in any part of the UK. So it's not the cost of the hotels that has brought this. And there are skilled people unemployed here."

He sounds more confused than angry and doesn't understand why the government sound reluctant to intervene. He predicts that, come the general election, the Labour MP for Cleethorpes, Shona McIsaac, will lose her seat.

"The town council is already a Tory-LibDem coalition. They will pay for this," he says.

Other hoteliers on Isaacs Hill agree that the town won't stand by and watch. One says: "We want a basic fairness and this isn't it." Another fears that Cleethorpes and Grimsby will be busy over the next few weeks "for all the wrong reasons".

Callison agrees. "I hope it won't happen. But I can see turned-over buses, buses on fire, and riots outside Lindsey. And the police don't deserve that. No-one does. But unless something is done, this place will become the front line in the battle."

Pat McFadden MP, the employment minister, attempted to throw protesters a lifeline by saying that the conciliation service Acas was being brought in to look at allegations provided by unions that the sub-contracting deals and processes at the Lindsey refinery were suspect.

But a lengthy Acas investigation will do little to ease the evident anger. And if the government are forced to admit their hands are tied by EU laws, especially in the middle of the current recessionary storm, Gordon Brown's already dented credibility will suffer further.

The environment secretary, Hilary Benn, illustrated the predicament the government finds itself in. Downing Street was at pains to stress that the contract for the desulphurisation plant was awarded when there were accepted skills shortages in the construction sector in the UK. However, the recession and Britain's falling GDP means this is no longer the case.

Benn, however, said those attending the demonstration were "entitled to answers". It made it sound that what Number 10 was saying wasn't enough. And it won't be when the protests resume tomorrow.

Although JE Jacobs, an American construction and technical services company whose global revenues exceeded $3.5 billion last year, were awarded the £200 million contract to deliver Total's desulphurisation plant, part of the work was sub-contracted to the Italian firm, IREM.

JE Jacobs and IREM both maintain the tendering process was rigorous and that all work by the Italian and Portuguese contract staff is paid at "blue book agreement" rates. This means the pay levels for skilled and semi-skilled labour in the sub-contracts are determined by the grades assigned by the national forum of the Engineering Construction Industry Association. However, local construction workers believe IREM found ways of getting round the "blue book" deal - and they want the government and Acas to investigate.

John Harpem, who works at the Conoco part of the Lindsey refinery, suspects that work assigned to IREM is being treated differently to the rest of JE Jacobs' work for Total.

He says: "The unions are concerned that some of the project has been cordoned off and given a special status, because these foreign workers are being paid, it's claimed, blue book rates, and then have their accommodation and food and expenses thrown in as well. It doesn't add up."

IREM in Italy says it doesn't know what the fuss is all about. The company says it won the sub-contract - thought to be worth £17m of the larger contract - and followed the local rules to the letter, and on matters of pay, conditions and other issues of concern to local unions, played it by the book.

However, IREM's vice-president, Giovanni Musso, offered the insight that he suspected events were linked to the world economic crisis.

Bob Callison, on Isaacs Hill, agreed with the Italian boss's assessment, but not the eventual remedy. "This place, North East Lincolnshire, should be the line in the sand. It's 300 Italian and Portuguese today. But where will it be in Britain tomorrow?"

Callison knows that Grimsby and Cleethorpes and many other places in the region have been built using foreign labour. Even the name Grimsby is Danish, with local legend suggesting it was founded by a Viking with the name of Grim, with the Danish word for village - "by" - added on.

Immigrant Irish labour also played a large part in the first construction phases of the Lindsey refinery when it came on stream in 1968. But in the downturn of 2009, local history and EU rules matters less than a job today or the prospect of a job tomorrow.

Although Gordon Brown has warned against the dangers of protectionism and said yesterday in Davos at the World Economic Forum that history offered "no clear map" of how to deal with the current recession and crisis, it is his promise of 2007 - "British jobs for British workers" - that threatens to weaken the government's response to the "front line" in Lincolnshire.

In Grimsby town centre yesterday, in front of a line of boarded-up High Street shops, a group of middle-aged men, wrapped up against a cold wind and the prospect of snow arriving, argued over what was going to happen next.

"I want to see one thing," said one man. "I want Gordon Brown to come here. Cause if he bloody well does come, there won't be a red carpet."