The Allseas Pieter Schelte. Pieter Schelte Heerema was a pioneer of the offshore engineering business but in his earlier life a Waffen SS member and Nazi. Heerema fought with the viscious Waffen SS, commanded by Heinrich Himmler, and later became a director of a Dutch company that rounded up labourers for the Nazi war effort. He spent 14 months in prison for war crimes but moved to Venezuela after his release, where he supported former SS men who had escaped from Europe after the German defeat. In the 1970s, he took interest in the the Adolf Hitler diaries – later proven to be forgeries - in the hope he could prove that Hitler did not order the Holocaust.

Allseas has resisted changing the name of the Pieter Schelte despite pressure from Jewish groups, including the Executive Council of Australian Jewry and unions. But after criticism from the British government, the company has backed down. British Energy secretary Ed Davey said the name of the ship was "wholly inappropriate and offensive". Allseas has won plaudits in Parliament from the Coalition for its union-busting approach to workplace arrangements. In 2012, it won a landmark Federal Court ruling that its full-time ship crew were employed outside the migration zone of Australia's coastine and did not require visas. As a consequence, the pay and conditions afforded the Australian maritime workforce did not apply to its crew until Labor brought in a new law - the very last piece of legislation passed by the Gillard government, to enforce a visa regime for at-sea workers. Assistant Minister for Immigration and Border Control Michaelia Cash, has twice used Allseas as a case study in the Abbott government's bid to water down Labor's Migration Amendment (Offshore Resources Activity) Act 2013.

Paddy Crumlin, president of the International Transport Workers' Federation and national secretary of the Maritime Union of Australia, welcomed the backdown but said it was "utterly shameful" that a convicted Nazi war criminal had been honoured in the first place. "To even countenance honouring a Waffen-SS officer just shows how twisted, arrogant and out-of-touch Allseas management is," he said. "It is worth noting that Allseas has a long history of seeking to drive down safety standards and working conditions for seafarers the world over. "It is this group that the Australian government is taking its lead from when it comes to driving changes to its offshore visa arrangements." Allseas said in a statement that it had changed its view after "widespread reactions" had emerged. "It has never been the intention to offend anyone," it said.

A spokesman for Senator Cash said: "The fact that the Minister has referenced the landmark Allseas case in the Australian Senate should not be interpreted as an endorsement of a name of a particular ship – any such inference is ridiculous. "The Minister is supportive of companies whose presence in Australia helps create jobs for Australians and helps grow our economy." Follow us on Twitter