GLASGOW’s last shipbuilder has signalled it is ready to snub orders for new Royal Navy frigates amid concerns of a competitive “race to the bottom” on price.

With orders for the next 20 years, BAE Systems Naval Ships remains firmly upbeat about its Clyde yards, Govan and Scotstoun.

The giant has secured a contract for one type of frigate, the sophisticated Type 26, but its managing director, Iain Stevenson, is far less sure about whether it will build another, the smaller Type 31.

For years effectively the only maker of complex warships in Britain, BAE Systems must now compete for the Type 31, a light frigate first mooted as the UK Government scaled back talk of 13 Type 26s before the independence referendum to just eight now.

Crucially, the navy has suggested it will be seeking an up-front price for a vessel that may have to be designed from scratch in just five years.

Speaking to The Herald, Mr Stevenson said: “We do want to be involved in Type 31. But we have questions. Does it have a budget? What are the timescales. We have not got solid facts.

“Type 31 could be a race to the bottom. If it is a front price contract people might bid for it to win and it and it might put them out of business. We would not, because we are BAE Systems.”

The UK Government is not expected to reveal outlines of what exactly it wants the Type 31 to do until early next month.

Opposition politicians, both Labour and SNP, have been critical over what they see as confusion over the programme.

BAE Systems does have an idea for a design it thinks might work, a class called Cutlass which amounts to a stretched corvette.

But Mr Stevenson and other executives are frank that they, like the politicians, are not entirely sure what their only customer wants.

There has been speculation that BAE Systems and Babcock International, which owns the Rosyth Dockyard in Fife, would go head to head for the ships, meaning they would be likely be built in Scotland.

Previously BAE Systems was seen as the UK’s strategic manufacturer of warships. But new competition means other yards - none of which have built a complex warship on their own in recent decades - may try to get a slice of the action.

Watching the slow, careful launch of HMS Medway, the latest of five patrol vessels his yards are building, Mr Stevenson, however, was content.

He has orders for the far more expensive Type 26 ships on his book. “We have a contract for three of them £3.7bn. And we have another batch of five which takes us out to 2035. That is 20 years of continual warship building on the Clyde.

“In my 30 years of experience, having that strength of order book is exceptional. What other industry can say it has orders for three decades?

A Ministry of Defence spokesman said: “The National Ship Building Strategy will make clear our plan for Type 31 and will be published in due course.”