MORE than 350 people packed the first day of a public inquiry into plans for a £500m new dock which could have massive ramifications for the New Forest.

Associated British Ports wants to build a new container terminal at Dibden Bay - a move which has concerned environmentalists and residents.

But on the first day of the hearing at Applemore Recreation Centre near Hythe, Southampton City Council threw its weight behind the proposals.

John Hobson, QC, putting the case for the council, accepted there were problems relating to environmental considerations.

He said they could generally be overcome, adding: "The council is satisfied that there is a demonstrable and overwhelming need and that this need outweighs the impacts of the scheme, taking into account the measures that are proposed to offset those impacts."

Referring to a possible 2,000 jobs being created at Dibden, he said: "The failure to permit the expansion of the port would not only mean that these significant additional employment figures would be foregone; it would have very serious consequences for the city of Southampton and the wider region."

On the question of the damage to nature conservation, he pointed to ABP's mitigation measures, which include an inter-tidal feeding habitat for birds between Hythe and Fawley where the dredgings from the port development would be used to raise the land level, an inter-tidal creek between the bay and Hythe Marina and the creation of additional wetland habitats.

On the question of traffic, Mr Hobson said it was the view of Southampton's consultants that the development "should have no impact within the city council's area".

"Outside that area, the main impact is likely to be on Junction 3 of the M27, where improvement works might be necessary," he said.

ABP's counsel Martin Kingston highlighted the national importance of the proposed development.

And fending off suggestions that there was ample capacity elsewhere in the country, he said full capacity was likely to be taken up by 2005 and that there was no room for expansion on the Southampton side of Southampton Water.

The inquiry is set to last as long as 18 months.