A substantial cash injection was made at this point, said the statement, and the business was eventually acquired by an investment consortium. In spite of new orders on the books, further cost cutting measures were necessary and 25 staff were laid off in January 2004.

However, the company was unable to recover from the previous losses, said the statement, and after CBA had carried out a review of the options with the board, the remaining employees were laid off on June 3.

CBA says several parties have expressed an interest in acquiring the business.

In spite of the statement, locals claim ulterior motives are afoot.

The company leased its site from Peter Harrison, whose GBR Trust America's Cup project is run from the adjacent land. Harrison has tried "several times" to obtain planning permission for a development of 400 homes that would, say locals, require the Souter site.

The applications have attracted strenuous objections from the local community.

"Mr Harrison hasn't ingratiated himself with the local community, " one source told BBwryly.

Souter Marine had been building boats on the Medina site since 1803, specialising in small commercial vessels, such as pilot boats and RNLI lifeboats. The yard's famous landmark hammerhead crane was installed in 1911.

Souters had worked for the RNLI since 1973, producing craft, ranging from the inshore Atlantic 75 to the 17m Severn.

First hints of trouble at the firm came after the last Trent Class lifeboat was handed over in December 2003. The following month saw redundancies announced at the firm. The remaining 49 employees were made redundant on June 3.

But BB's Iain Sutherland, says the closure has given the Cowes Marine Cluster (CMC) a chance to shine.

The cluster is urging the workforce to register so they can be contacted when work becomes available.

Companies like GRP Laminates, Victory Yard and South Boats are hopeful of taking on some workers.

CMC project director Sally Lynskey said: "We are now doing all we can to re-employ as many of the workforce as we can around member businesses."

But the closure of Souters has actually saved jobs in Lymington - see page 6.