Steve Jary, Prospect National Secretary with responsibility for Gibraltar and the MOD, said: "We are deeply disappointed by the decision to privatise this activity. After we worked so hard in the UK to get ministers to agree to have an in-house bid in the first place, it is a blow to see the efforts of our members in the naval base come to nothing."

Prospect reassured its members that it has vast experience dealing with so-called TUPE transfers and already has many members in Serco.

"There are significant challenges ahead and Prospect will continue to be there to support our members at the naval base in negotiations with the new contractor about the transfer of staff," said Jary. "We have a long-standing relationship with Serco from their involvement in MOD marine services, UK government science and the nuclear industry. We commit to bringing our influence to bear on the situation in Gibraltar, if that’s what our members want."