UNION leaders have warned independence would "finish" shipbuilding on the Clyde after the Ministry of Defence made plain it would not place orders with Scottish yards if they were no longer part of the UK.

The Confederation of Ship Building and Engineering Unions, Unite and the GMB told MPs yesterday that ministers had made it "crystal clear" they would not allow Royal Navy ships to be built in a foreign country.

They said they were told the referendum outcome would affect the contract to build the new Type 26 frigate, which would guarantee thousands of jobs for decades.

Without UK defence contracts, up to 16,000 jobs would be in jeopardy within months of the 2014 referendum, the union leaders warned.

Appearing in front of the Commons Scottish Affairs Committee, Duncan McPhee, from Unite, said his estimate was that the Scottish shipbuilding industry "would be greatly reduced or, in fact, finished".

However, the SNP accused the UK Government of "scaremongering" and said Scottish yards would have a "healthy order book" under independence.

The union leaders were reporting on a meeting yesterday with Defence Minister Peter Luff. The MoD had been candid about the prospect of Scottish yards getting UK defence contracts after independence, they said.

"They made the point that the UK had not bought a ship from outside the UK in the last 50 years and they did not intend to start now," Raymond Duguid, also from Unite, said.

The group also said ministers had been clear an independent Scotland would not be given the contract to maintain the huge aircraft carriers being built on the Clyde.

The result could be the death of shipbuilding in the west of Scotland, they warned.

A total of up to 16,000 jobs in shipbuilding and the supply chain could be lost.

Mr McPhee warned that the decision on the Type 26 contract was due "around the same time" as the 2014 independence referendum, and predicted Scottish yards could face closure within months of the vote.

He challenged the Scottish Government to explain how they could safeguard 10,000 shipbuilding jobs and another 6000 in the supply chain.

"I would like to ask the Scottish Government how they plan to defend the shipbuilding industry in Scotland," he said.

Scotland Office Minister David Mundell, who attended the meeting with Mr Luff, warned the consequences of independence for Scotland's defence industries could be "severe".

"It is right and proper that the unions examine the issue and make a responsible assessment of how their members' best interests can be met," he said.

"I hope the Scottish Government can be as forthcoming when they are held to account by the Confederation."

Ian Davidson, MP, who chairs the Scottish Affairs Committee, said it planned to grill Mr Luff next month.

MPs wanted to "pursue further the impact of Scotland being treated as a foreign country for procurement purposes by the rest of the UK".

However, Angus Robertson, the SNP's Westminster leader and defence spokesman, noted the contract to build the Navy's next MARS fleet tanker had been given to a South Korean firm.

He said: "The scaremongering of Tory ministers has been sunk again. In reality, shipbuilders across Europe regularly get orders from other countries.

"France makes ships for Russia, and the UK has made frigates for Malaysia.

"The Type 26 destroyer, now called the Global Combat ship, has attracted interest from countries including Australia and Canada."

He added: "With independence, Scotland would have a healthy order book.

"It is not the London Government that makes the yards successful, it is the second- to-none Scottish skills base and technical expertise that brings orders to the yards, and that will continue under independence."

The committee had earlier heard an independent Scotland would have to create its own currency before it could join the euro.

Drew Scott, from Edinburgh University, said there was no legal basis to move directly from sterling to the euro.