Belfast shipyard Harland & Wolff will face competition from at least two other European shipyards for a contract to provide two new cruise ships worth more than $300 million, The Irish Times has learned.

Speaking from Miami yesterday, Mr Les Royle, chief executive officer of Luxus Holdings, the company behind the new cruise line project, said he was in discussion with one other British yard and a European yard, in addition to Harland & Wolff.

Mr Royle denied a report that Harland & Wolff had been selected as "exclusive bidder".

He said he would find it favourable if Harland & Wolff built the ships, as would many of the executives in Luxus Holdings, many of whom are British expats. However, he said it was a question of whether Harland & Wolff could build the ships to the company's specifications and cost.

Mr Royle said he had travelled to Belfast recently to discuss the contract with Harland & Wolff's management. He was impressed by the work the yard had put into the Queen Mary project which showed they had the expertise to carry out a project of that size.

"It shows a lot about the management of the yard," he added.

Luxus Holdings has contacted the Department of Trade and Industry in Britain about the possibility of obtaining a package of funding measures under the Home Ship Building Guarantee Scheme.

The deal for two 26,500 tonne cruise ships, with an option of two more, could help stave off closure at Harland & Wolff, which recently issued redundancy notices to its 1,745 workers.

However, Mr Tony Gray, of Lloyds List, a specialist shipping publication, said possibilities, which often did not amount to much, could crop up when a shipyard said it was in trouble. However, he said if Mr Jim Davis, chairman of the UK-based International Maritime Industries Forum, chose to join Luxus Holdings it would add some credibility to the project.

When contacted yesterday Mr Davis said he would accept the position of chairman of Luxus Holdings if it finalised its funding package for the project.

Mr Davis was a director of P&O, when it received the last cruise ship built from Harland & Wolff - the Canberra - in the early 1960.

Mr Adam Ingram, Minister of State for Northern Ireland, met Harland & Wolff management yesterday evening to discuss the current situation at the shipyard.