Fears that an iconic industrial site in the Highlands could end up as a radioactive scrap yard have been re-ignited by news that a nuclear decommissioning company is set to buy the site.

The former Nigg Fabrication Yard on the Cromarty Firth is up for sale, and DSM, the Birmingham-based demolition company, has become the "preferred bidder". It specializes in breaking up large structures, including oil rigs, ships and buildings.

DSM claims "vast experience and knowledge of nuclear decommissioning" and boasts it can "address the entire range of engineering issues in this complex business".

The company's customers include the government's Nuclear Decommissioning Authority, British Nuclear Fuels, the British Nuclear Group and the UK Atomic Energy Authority, which between them are responsible for dismantling all of Britain's defunct nuclear plants. DSM has also done business with the Royal Navy, which is trying to dispose of up to 27 old nuclear submarines over the next 30 years.

Despite DSM's insistence that it has "no intention" of using Nigg for nuclear decommissioning, experts and environmentalists are skeptical. The yard has previously been proposed by other companies as a possible site for dismantling nuclear-powered submarines.

Pete Roche, an Edinburgh-based nuclear consultant, said: "It is extremely worrying that a company that specializes in nuclear decommissioning is the favorite to buy the Nigg yard."

It would be far better for the yard to become a centre for renewable energy development than a dumping ground for old submarines, he argued. "It is an ideal base for deep water offshore wind, wave and tidal power."
Stuart Hay, head of research at Friends of the Earth Scotland, called on DSM to "come clean" about its plans for Nigg. "We very much share concerns being expressed locally that the yard should not become some sort of dumping ground," he said.

"It would be a terrible shame indeed if the jobs that were to be created in clean, green fabrication were forced to make way for jobs dealing with dirty oil, gas and nuclear facilities."

The Nigg yard covers nearly 100 hectares near Tain, and includes one of the largest dry docks in Europe. Opened in 1972, it employed up to 5500 people building and repairing offshore oil rigs.

The yard closed in 2000, though part of the site has been used since to develop offshore wind turbines. It was put up for sale in 2005 by its owners, Kellogg, Brown and Root (KBR), a US defense multinational.

The port authority's chairman, Highland councilor Jim Grey, said: "The future of Nigg should be centered on engineering construction making full use of the skill base that is located in the inner Moray Firth. This area could be at the cutting edge of energy developments across a number of sectors, not cutting up old ships."

KBR declined to comment on "pending real estate transactions".

DSM said: "It is not DSM's intention to undertake nuclear decommissioning. It is DSM's intention to create a multi-use fabrication, decommissioning and industrial park, centered around the large-scale facilities present at Nigg."