It is being proposed that some British passports will be produced in Malta, as part of a huge contract that has been awarded to De La Rue in the UK. The award of the contract has already caused a huge outcry in Britain.

The Oldham Evening Chronicle reported that MP Michael Meacher has hit out at the British government for abandoning Oldham − which has produced the British passport for 40 years − in favour of a company with little experience.

The Oldham West and Royton MP said awarding the passport contract in June last year to De La Rue, not Chadderton-based 3M, was a mistake, and the original procurement was “seriously flawed”. He called for the new, non-exclusive passport contract to be re-tendered.

The Labour MP told the House of Commons 3M had informed government they could save £100 million over the 10-year period of the contract − and awarding it to the Oldham company would protect 100 jobs.

Mr Meacher added: “In the current circumstances, £100 million is not a sum to be sniffed at. It is not far short of one per cent of the entire spending cuts that the government hopes to make in this fiscal year; a reduction of that magnitude cannot be dismissed or disregarded.”

Speaking in a half-hour Commons debate he secured on the UK passport contract, Mr Meacher said the product quality and the volume of passports 3M can produce was second to none.

He said: “I can say without risk of rebuttal that De La Rue, to which the British passport has been entrusted, has no great track record in the production of this quantity of passports.”

Mr Meacher claimed 3M produced all the passports in the UK, maximising jobs, compared with De La Rue, which proposes to produce some in Malta.

“If the contract goes ahead without re-tender, more than 100 jobs will be removed from the current operation. I understand that only a tiny fraction of those employees will find employment under the new contract,” he said.

According to some comments in the Oldham paper, there are also some concerns about security in Malta.

A correspondent, Mike Taylor, wrote: “Hope the security in Malta is better than Chadderton or we will be inundated with people bearing ‘genuine fake’ passports.”

Another correspondent wrote: “De La Rue do have experience of producing quality security printed products by printing the nation’s banknotes. Which as a rule do not get stolen while being delivered by the staff. The news that De La Rue is now subject to a takeover by the French business Oberthur Technologies however is worrying that British passports are being manufactured by a foreign company.”

De La Rue said on Monday it received a preliminary takeover approach from another company following reports that it had rejected a €750 million offer from French rival Oberthur Technologies, triggering a surge in its shares.

In a short statement, De La Rue said it had “received a highly preliminary and opportunistic approach” from another company, but didn’t name it. “There is no certainty that this highly preliminary approach will lead to an offer. A further announcement will be made as and when appropriate,” it said. Nobody was immediately available to comment at Oberthur.

Shares of De La Rue rose sharply at the market open. The shares had been under heavy pressure since the company’s problems came to light earlier this year, and remain down almost 20 per cent from the start of the year.

De La Rue, the world’s largest printer of banknote paper, has been struggling to overcome paper production irregularities that hit the company’s earnings earlier this year. Its chief executive, James Hussey, resigned on 12 August, a month after De La Rue suspended banknote paper production and launched an investigation into quality issues. The investigation determined employees deliberately falsified certain paper-specification-test certificates for a limited number of customers.

Last month, the company scrapped a share buyback after it booked €35 million in additional costs stemming from its production problems and warned that the financial impact this year and in subsequent years was unclear. It said it was close to appointing a new CEO to replace Hussey. “There is no question that we will bounce back,” said Chairman Nicholas Brookes.

Sky News reported late last week that De La Rue, which prints more than 150 national currencies as well as travellers checks, stamps and passports, rejected Oberthur’s approach. The all-cash offer was made in the past few weeks, Sky said on a reporter blog. It was rebuffed as De La Rue thought the offer undervalues the company.

Privately-owned Oberthur claims to be the second-largest provider of security and identification solutions and services based on smart-card technologies for mobile, payment, transport, digital TV and convergence markets. It says it is the world’s third-largest private security printer specialized in the production of banknotes, checks and numerous security documents in more than 50 countries.

The Times of London reported on Monday that Oberthur is considering coming back with a higher offer. It said that apart from printing sterling banknotes, De La Rue has a contract with the UK’s Home Office to print passports, making it a sensitive takeover target.

UK investment bank Panmure Gordon said earlier this week that the bid was said to be around 750-800 pence a share and all cash. It added it represents a realistic level given the significant reputational damage De La Rue suffered after the falsification of production standards.