COLCHESTER taxpayers are set to lend a boat building firm more than £500,000 as part of a move which will create more than 120 jobs.

Last month, CTruk announced it was successful in bidding for £1million from the Government’s regional growth fund.

The cash will help the Brightlingsea firm create an £8.3million centre at the former Fieldgates site in Haven Road, the Hythe, Colchester.

Now it has emerged that grant will be supplemented by a loan of more than £500,000 from Colchester Council.

The move will have to be rubber- stamped by the Colchester Council cabinet, when it meets for the first time after the borough elections, as well as the council’s revolving investment fund, which next meets on June 3.

Paul Smith, Colchester Council financial boss, said: “The plans are yet to be finalised and it will require the support of both the Cabinet and certainly the revolving investment fund.

“But, certainly, it would help create a significant number of highly skilled jobs in Colchester.

“The scheme has been given Government support because they can see the export potential of the project and that is great news for Colchester.”

Mr Smith emphasised the money could only be given as a loan and repayment terms would be set.

The proposals have been published because any decision which means the council will make £500,000 in income or spend £500,000 must be made public.

Ctruk’s expansion means the company would change from a boat builder to an advanced composite technology centre.

The Hythe site would be a base for bigger boats to be built, to serve the offshore wind farm industry.

Peter McIntosh, CTruk chairman, said: “It is our intention to continue driving UK innovation in marine vessel design and to remain competitive in a changing market.”

Work is planned to start on the new building in the spring.

The Government investment will also create 15 apprenticeships.