Atlas Elektronik UK - which is based in Winfrith - has been shortlisted to design the newest Royal Navy warships.

It is one of three companies, including BAE Systems and Babcock, which have been chosen to compete to design and manufacture five Type 31e Frigates.

Each group will be given £5m to progress their designs, which will mean new jobs will be created.

The winning design is expected to be announced at the end of next year.

A spokesman for Atlas Elektronik UK said: “Our experienced consortium is offering the MOD a frigate solution based on decades of our experience in delivering highly capable and adaptable warships to navies around the world.

“Our consortium has supplied 82 vessels to 14 countries in recent years. We are confident that our Type 31e Frigate provides the Royal Navy with a cost-effective, export desirable solution ideally suited to a maritime security role.

“Our Type 31e design, which is already in service with two navies, will be built by Harland and Wolff in Belfast and Ferguson Marine Engineering in Glasgow and will mark their return to military shipbuilding.”

He added: “Our solution will result directly in new jobs in Belfast, Glasgow and Dorset as well as indirect opportunities across the UK supply chain.”

However, Atlas Elektronik UK was unable to confirm the total number of jobs which will be created in Dorset.

He added: "If we are chosen we will be responsible for the design and build of these five frigates which will result in a lot of UK business happening in Dorset."

Defence Minister Stuart Andrew announced the competition in Portsmouth earlier this week.

He said: "This is the first frigate competition the UK has run in a generation, and today we are funding three shipbuilding teams with extremely exciting concepts to continue developing their plans. Next year we will announce the winning bidder, and one of these designs will go on to bolster our future fleet with five new ships, creating UK jobs and ensuring our Royal Navy maintains a truly global presence in an increasingly uncertain world."

The ships will make up the next generation of the Royal Navy fleet, along with eight Type 26 warships which will start being delivered from the mid-2020s. The names of all eight Type 26 frigates have now been announced, and the Defence Secretary Gavin Williamson has also outlined that they will be homed in Devonport. The decision on where the Type 31e frigates will be based is still to be made.