LEVIS, Que. The Quebec government has announced a new lease on life for the Davie shipyard, which has been fighting for survival for years.

Industry Policy Minister Elaine Zakaib says as many as 700 workers could be employed at the facility in the next three years.

Zakaib told a news conference on Monday that the government has approved the sale of the shipyard from ontarios Upper Lakes Group to Zafiro Marine, a British company.

The government was involved in the sale through its investment arm, Investissement Quebec, which loaned Davie $35 million in the form of convertible debentures.

Investissement Quebec had recommended that the sale be approved.

Upper Lakes Group acquired Davie in the hopes of winning a large shipbuilding contract from the federal government which was embarking on an ambitious $35 billion plan to renew its naval fleet. Quebec lost out in the bidding competition, to Halifax and Vancouver.

Upper Lakes subsequently decided to withdraw from the shipyard purchased with SNC-Lavalin, saying the financial risk was too big.

Davie has employed more than 1,000 people in the past.