The Sunday edition of The Independent reports that an unlikely coalition of right-wing MPs and union leaders have warned that the security of the Falkland Islands would be compromised by shutting BAE Systems' shipbuilding operations in Portsmouth.
According to UK political sources the defence giant seems certain to confirm early in the New Year that Portsmouth, where the ‘Mary Rose’ was built, will be closed due to a lack of future work, costing up to 1.500 jobs.
BAE has been building two Queen Elizabeth class warships worth a combined £5bn in Portsmouth and in two yards on the River Clyde, but after the middle part of this decade there is a lull until the Type 26 Global Combat ship program is under way.
Gary Cook, the regional GMB officer who looks after employee relations at the Portsmouth yard, said: We've barely enough ships to secure the Falklands at the moment. What with the Argentine economy where it is and oil having been found do we really want to go cap-in-hand to the French to borrow some ships if we need to protect them?
There is also a concern in the industry that the job losses would mean rare, vital skills are lost to the nation. As a result, even if shipbuilding demand did increase again BAE would be unable to find sufficient staff to undertake the orders.
Sir Gerald Howarth, the former defence minister and a Conservative MP in Hampshire, said the government must ensure that the defence of the realm is not undermined by BAE decision.
However, data supplied by consultant LEK is understood to have showed BAE that keeping three yards open is economically challenging at best. This information is thought to have been passed on to business secretary Vince Cable during a visit to the defence group's Portsmouth facilities last week.
Sir Gerald said: We are a maritime nation with 92% of our trade being by sea. Therefore maintaining our position on the high seas, protecting our trade routes, and defending our interests, not least the Falklands are important.
Separately, a team led by former Ministry of Defence mandarin Admiral Sir Robert Walmsley produced a report suggesting Portsmouth is the most likely shipbuilding operation to be axed. Defence secretary Philip Hammond has been considering Sir Robert's findings for several months.
A closure will be a reminder of the difficulties facing the defence market, two months after BAE merger with Airbus-owner EADS was blocked by the German government, concludes the report.
Meanwhile it was reported that Germany is set to join France and Spain as a direct shareholder in EADS under new plans unveiled by the European aerospace and defence firm. EADS announced that Germany and France will eventually hold equal states of about 12% and Spain, 4%.
It said this allows the countries to protect their strategic interests. Under the terms of the agreement, current shareholders German carmaker Daimler and French media firm Lagardere will reduce their stakes.
Today is a good day for EADS! We are making a big leap forward in terms of governance, actually the most important change since the creation of our company more than 12 years ago, said Tom Enders, chief executive of EADS.
It also gives EADS the freedom of movement it needs to pursue its development, he added.
Earlier this year, a planned 45bn dollars merger of EADS and BAE Systems fell through after the UK, French and German governments failed to overcome political objections.
The UK wanted its counterparts to agree to limit their influence in the merged firm in order to maintain BAE strong working relations with the US Pentagon, while it is understood that Germany was fundamentally opposed to the deal.