The Government has agreed a contract worth £859 million that will see BAE Systems (www.baesystems.com) continue with the project for a new fleet of UK warships.

The company has been working on plans to provide 13 new Type 26 Global Combat Ships since 2010. The new contract will see it invest in the equipment and facilities that will be needed before construction of the ships can start.

This contract follows one for three Offshore Patrol Vessels, which are now under construction in Glasgow. It will help to support more than 600 jobs in Scotland and over 1,000 more throughout the UK in both BAE Systems and its supply chain.

Chief executive Ian King said: “Through the Type 26 programme, we are transforming the way we design and manufacture naval ships, with innovative new technologies, leading-edge processes and modern infrastructure.

"New ways of working ensure that we can continue to deliver the highest-quality equipment at the lowest possible cost and compete effectively for future UK and international orders.”

Welcoming the news, Prime Minister David Cameron said: “This is a substantial investment in our ship-building industry, safeguarding the jobs of 600 workers in Scotland and many more across the UK. As part of our long-term economic plan, we’re not just building the most advanced modern warships in the world, we are also building the careers of many young people with apprenticeships that will set them up for life.”

The Type 26 contract takes effect from 1 April, with the manufacturing phase expected to begin in Glasgow in 2016. The supply chain will involve about 30 companies. The first vessel is due to enter service in the early 2020s, and the Type 26 class is expected to remain in service until 2060.