A dredging firm has closed its harbour plant, casting doubts on its future just weeks before multi-million-pound marina expansion plans are announced.

United Marine Aggregates (UMA) has pulled all staff out of its plant at Littlehampton harbour.

Proposals for commercial development at the harbour are due to be unveiled next month by consultants Halcrows.

The plans could include new yachting berths and leisure facilities.

The possible closure of the port has also been suggested, though only as the most extreme option.

UMA insisted it was merely temporarily "mothballing" its plant, which washed, screened and crushed sea aggregates, and that it could return if business improved.

Director Kevin Seaman blamed a downturn in the building industry, which meant fewer orders for sand and gravel dredged from the sea bed.

Five members of staff were based at the Littlehampton plant. Two are likely to be made redundant, with the other three relocated.

Mr Seaman said: "The plant has been suspended for the moment because it just doesn't have the business it used to. Some of the main outlets we used to supply are either closed or not taking as much material.

"But we'll be keeping a close eye on the situation.

"We have a lease there which we'll continue to retain in the hope we can resume operations at some point.

"We know options for the future of Littlehampton harbour are being reviewed but we're not aware of any formal plans yet."

Dr James Walsh, an Arun district councillor and chairman of the Littlehampton Harbour Board, said: "Clearly there's been a downturn but I'm pleased to see they're only mothballing the plant for the time being."

Halcrows' study is being carried out with West Sussex County Council and Arun District Council, which is also considering developing the nearby West Bank area.

Dr Walsh suggested there would be major changes at the port whatever the results of next month's report and subsequent public consultation.

He said: "We could continue as we are, with a mixture of commercial sea dredging aggregates and leisure.

"Alternatively, we could look towards becoming a leisure-only port with more yachting and marina facilities or simply close the port.

"Closure isn't really an option but at this stage nothing is ruled out and nothing is ruled in.

"This will be a strategy not just for the next few years but the next 25."

Work began in December 2001 on the award-winning East Bank development, which involved the construction of 170 homes, a £1.75m visitor centre, new harbour offices and the restoration of six derelict wharves.

The scheme, part-funded by the district council, the South East England Development Agency and private developers, had been delayed by legal challenges from fishermen.

Dr Walsh said: "I think the harbour has improved enormously in the past few years on the leisure side, both for permanent yachts and visiting yachts."

But he warned there would be concern among board members and nearby residents if plans for the West Bank involved large-scale house building.