Harland and Wolff shipyard says it has “reworked” an application for government support as concerns grow for the future of the business.

The Financial Times reported that the government intended to reject the firm’s application for a loan guarantee.

The Belfast-based company had requested a 100% government guarantee to cover £200m of new borrowing.

It says it has now proposed a deal for a standard 80% guarantee level that “has been awarded to hundreds of other companies”.

The loan guarantee is seen as essential for the firm’s financial stability.

It needs to refinance an £90m high interest loan and take on new borrowings as it scales up its operations ahead of a major Royal Navy contract.

Speaking on Wednesday afternoon, the new Northern Ireland Secretary of State Hilary Benn said that the UK government were committed “to the maintenance of shipbuilding in Northern Ireland”.

But Mr Benn refused to comment further on the option of nationalising the shipyard.

“These are commercial sensitive issues; the government is very seized on the issue in relation to Harland and Wolff,” he added.

Harland and Wolff is seeking to borrow from a consortium of UK banks, but needs the government to act as guarantor – meaning if the loans were to go bad the state would step in to repay the lenders.

The Financial Times says the new government considers it would be “irresponsible” to offer the guarantee to the heavily loss making firm.

The company recorded a loss of £43m in 2023, following losses of about £70m in 2022 and more than £25m in the previous 17 month accounting period.

Trading in Harland and Wolff’s shares has been suspended for more than two weeks after it missed a deadline to publish independently audited accounts.

On Monday it said the audit was now “undergoing final audit partner review”.

It added that it had not been informed of any decision on the loan guarantee and stood ready to “meet with the new government at their convenience”.

The head of the Unite trade union, Sharon Graham, described the yard as of “strategic importance”.

She said: “Our members have demonstrated their ability to win and deliver national strategic shipbuilding projects.

“Unite will do whatever it takes to defend our members and the shipbuilding sector.”

Harland and Wolff was bought out of administration in 2019 and in 2022 was part of the consortium which won a major contract to build three Royal Navy support ships.

The company has had to invest significantly to prepare for that work which has contributed to its losses.