A contract has been signed for the first construction phase of a £1.5 billion container port on the Thames.

Dubai Ports (DP) World signed a £400m contract which will signal the start of work to develop the site on the north bank of the Thames.

The London Gateway container port and business park will be built on the former Shell Haven in the Thames Estuary, Thurrock.

The facility will be the first deep-sea port to be built in the UK in 25 years - it will also include an integral logistics park that will reportedly be the largest in Europe.

The port's proximity to London will enable a reduction of 52 miles in the distance travelled each year by trucks containing retail goods in the UK.

Up to 90% of good purchased in the UK arrive in a container and the new "super-port" is designed to radically change the way products are delivered to shops.

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The five-year contract awarded by DP World to the Laing O'Rourke joint venture includes construction of 1.2km of quay and three berths.

DP World is also promising that new technology will enable London Gateway to move 50% more containers per hour on and off ships than is currently being achieved in the UK.

The go-ahead came last year after a public enquiry and various amendments to original plans.

Tony Douglas, Chief Operating Officer of Laing O'Rourke said "we are delighted to have won the tender to help deliver such a hugely important injection of confidence into the UK economy".

Simon Moore, Chief Executive of London Gateway, said: "This contract is a major milestone in constructing the port. In an economic climate where the building industry is experiencing a sharp slowdown, this is great news for Essex and the UK in general."

Mr Moore denied that the facility would have a negative impact on other UK ports and said that "increased competition is good news for the shipping lines and for the end consumers".

The logistics park will open in the second half of 2010, with the first ships arriving in the port in early 2011.

Construction work will begin later this year at the 1,500 acre site.

Work will also be done on the Thames to enable the world's largest ships to access the port.

(DS)