Jobs at a new engineering support centre in Shropshire are safe for the time being despite the loss of a £4 billion deal for armoured vehicles by defence giant BAE Systems.

Last year, the British company announced 211 people were to lose their jobs due to the closure of a factory site at Hadley Castle in Telford.

But in a dramatic U-turn, it said the jobs of 144 of those affected would be saved with the creation of a centre to support the work of the Ministry of Defence-owned Defence Support Group (DSG) in Donnington.

Yesterday, BAE Systems suffered a blow after the Government awarded a contract to build a fleet of 1,300 new tanks for the British Army to US rival firm General Dynamics.

But BAE spokesman Mike Sweeney said it would not have a “direct and immediate impact” on its plans for Donnington.

He said: “We don’t expect this will affect the decision to sustain 144 jobs at a new support centre in the area.”

It means 500 previously-announced job losses in its vehicles business which might have been saved if it had won the contract, are now under threat, mainly at its Newcastle factory.

However, General Dynamics has previously said that 10,500 British jobs would be safeguarded or created over the 10-year lifespan of the deal at its UK bases, if it won the bid.

Stefan Dlasczyk, of the union Unite which represents the majority of the workers at BAE, said up to 25 jobs could have been created in Telford if BAE had won the contract.

But he added the earlier decision to trim the workforce at Hadley from 211 to 144 was not connected to the contract loss and that he was “extremely positive” about the future for workers.