(WARSAW) - Polish competition authorities gave a green light Thursday to the takeover of the country's Gdansk shipyard, the cradle of the 1980s Solidarity trade union movement, by Ukrainian group Donbass.

In a statement, the national competition office said it had decided that allowing Donbass to step in would not skew the shipbuilding market in the Ukrainian group's favour.

The Baltic coast site has been in dire financial straits for years, and in September Donbass announced that it planned to buy a 75 percent stake in the shipyard for 400 million zlotys (110 million euros, 161 million dollars).

Donbass said that it later aimed to take over the remaining 25 percent.

It also said it would be ready to repay Polish state aid to the yard, in order to avoid having to slash capacity.

The subsidy issue has been at the centre of a battle between Warsaw and the European Commission, which warned that unless two of the yard's remaining three slipways were closed, it could order the yard to repay public funds.

The Commission, which is the executive body of the 27-nation EU, polices the bloc's competition rules to ensure that state aid is not used to give struggling companies an unfair market advantage.

With hundreds of jobs at stake, Poland has repeatedly said it would be ready to shut down only one slipway.

Warsaw and Brussels disagree over how much state aid has been paid to the yard since Poland joined the EU in 2004: the Polish government says it has given only 36 million zlotys, while the Commission says the sum is 192 million zlotys.

In an irony of history, the Gdansk shipyard has been an economic victim of its own political role in freeing Poland from communism, which gives it huge symbolic importance for Poles.

A strike by 17,000 workers in August 1980 at what was then the Lenin Shipyard forced the government to recognise Solidarity, the communist bloc's first free trade union.

The strike turned Lech Walesa, a shipyard electrician and Solidarity founder, into an international figure and sparked a groundswell of opposition that helped speed the final demise of Poland's regime in 1989 and of the communist bloc overall.

The yard has struggled to adapt to the free market.

It went bankrupt in 1996, only be to revived in 1998 when it was bought by the shipyard of neighbouring Gdynia. After renewed woes, it was taken over by the state in 2004.

It now employs 3,000 people.

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