The government has put forward a plan to restructure and partially privatise yards such as Gdansk to save most of the yard's 12,000 jobs.

If Brussels, due to receive the plan this or next week, is not convinced by the plan, state-controlled yards in Gdansk, Gdynia and Szczecin could lose $1.6 billion in state aid.

The forced closure of the yards would be political dynamite for the ruling conservative Law and Justice party whose leaders are former trade union activists.

Zbigniew Stefanski, who started work at the shipyard in 1974 at the age of 14, told Reuters: "Building ships is all I know how to do. The people who worked here fought for freedom and now some will have to go hungry."

Foreign investment

Experts say the government plan falls short and that only a full privatisation, including job and wage cuts can prevent a collapse.

Ireneusz Jablonski, from the Adam Smith Centre, an economic think-tank in Warsaw, said: "Politics must get totally out of the shipyards and it should be treated as a regular company, not a stage for political parties."

Andrzej Jaworski, chief executive of the yard, a political appointee and member of the Law and Justice party, said two investors from Germany and Greece had already expressed interest.
   
He said modernising equipment would reduce costs and give Gdansk a chance to compete with cheaper competitors from Asia and Europe.

Symbol of freedom

The shipyard blossomed under communism, building merchant ships for the Soviet Union. Its workers were badly paid and mismanagement led to strikes in the 1970s and 1980s.
   
After communism collapsed in 1989, trade unions blocked the sale of the yard to foreign investors, fearing massive restructuring and layoffs. Subsequent governments avoided radical changes and the yard has lingered on the verge of bankruptcy for years.

Lech Walesa, the former leader of the Solidarity movement, said: "The shipyard is the mother of freedom in Europe. You do not give up on your mother. Everything should be done to save it."