The Scottish and UK governments have "no legal route" to provide further financial support to Burntisland Fabrications (BiFab) in its current form.

BiFab – a fabrication works for the oil and gas, renewable and infrastructure industries – collapsed last month when a £2 billion deal to manufacture wind turbine jackets fell through.

The company had been previously bailed out by the Scottish government in 2017.

In a joint statement, the governments have committed to exploring options for the future of the yards and to strengthen measures to support the renewables supply chain.

Economy Secretary Fiona Hyslop said: "The Scottish Government has been working for more than three years to support BiFab.

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"We have left no stone unturned in our search for a solution to the challenges faced by the business. As a minority shareholder, we have been exhaustive in our consideration of the options available to us to financially support BiFab from public funds.

"The Scottish Government has been clear that State Aid regulations are a barrier to us providing guarantees on the contract from Saipem to build foundation jackets for the Neart na Gaoithe (NnG) project. The UK Government has similarly concluded that there is no legal route for them to provide support.

"The situation at BiFab is a culmination of a number of issues, the main one being the unwillingness of the parent company and majority shareholder JV Driver to provide working capital, investment or guarantees for the company.

"We are determined to secure a new future for the yards in Fife and the Western Isles. We will explore options for the future of these sites and, through this new working group, work with the UK Government to strengthen the renewables and clean energy supply chain."

A joint working group will be formed to consider ways to strengthen the renewables supply chain in Scotland and to secure future opportunities.