Up to a thousand green energy jobs could be created as a four year deadlock over the fate of one of northern Scotland's main industrial complexes looks set to be broken.

It is hoped the Nigg yard in the Highlands may be able to exploit the UK's plans to construct 7000 offshore wind turbines by 2020.

Turbines are currently shipped in from abroad due to a lack of fabrication yards in this country but Nigg is viewed as a potentially prime location because of its proximity to planned offshore wind farms.

The Houston headquarters of KBR, the American engineering and construction company which owns two thirds of the yard, has confirmed to The Herald that it is no longer in discussions over the sale of the facility, despite there being a preferred bidder in place.

Public agencies have been determined to revitalise the facility, which once provided employment for 5500 people building oil rigs, but where now just 150 people work.

A development masterplan, based on it being a multi-user site, projected the current number of jobs being increased eight fold and sustained for up to 20 years with £65m a year being injected into the local economy.

Highland Council officials have also been preparing to pursue a compulsory purchase order for the yard as the only way to break the stand-off between the company and an absentee Highland landlord, which had prevented the former fabrication yard being sold. KBR had been trying to sell the yard for more than four years. But 76 acres of the property, including what is one of Europe's largest graving docks, is owned by the Wakelyn Trust of the Nightingale family who own the Cromarty Estate across the Moray Firth.

KBR has a 30-year lease of the Trust's land but it has a clause that, before KBR can terminate the agreement, it would be required to reinstate the site, or pay the multi-million pound equivalent. KBR pays a rent to the Wakelyn Trust, understood to be around £100,000 a year.

In 2005 The Herald revealed that Able UK, the company which brought the toxic "ghost ships" from America to Britain for scrapping on Teesside, was interested in Nigg, but there was local outrage at the prospect.

DSM Demolition Group, a Birmingham-based company which specialises in demolition and decommissioning, was the preferred bider.

But yesterday Heather Browne, director of corporate communications for KBR, told The Herald: "KBR decided to close the yard due to lack of market demand in the North Sea and we continue to search for a viable and sustainable opportunity for the use of this facility. KBR can confirm that it is not currently engaged in discussions with any parties regarding the sale of the facility."

David Alston, Highland Council's budget leader and councillor for the Black Isle, said: "It seems to confirm all the indications coming from last month's meeting which were that KBR was having a major rethink about Nigg.

"The company representatives were curious and enthusiastic about the potential of the yard in the renewable sector. What had made the difference was that Britain was serious about renewables."

He said that Nigg was so important to the Highland economy that the CPO would have to remain an option. "But if KBR is winning contracts and creating employment at Nigg, it will not be necessary to pursue it," he added.

The Scottish Council for Development and Industry (SCDI) has said the future of the yard needs to be resolved quickly if it is not to miss out on the economic and job opportunities from the UK's plans to construct 7000 offshore wind turbines by 2020.

The UK Government established a £750m Strategic Investment Fund in the Budget, with energy-related bids already made on behalf of a number of Scottish yards, and the Scottish Government has also recently announced a £13m grant for Burntisland.

Scottish Secretary Jim Murphy will this week visit the yard and take part in a meeting organised by The Highland Council and Highlands and Islands Enterprise with US company KBR.