Labour's shadow defence secretary Vernon Coaker questioned the delay in telling Parliament that HMS Vanguard was to have its reactor refuelled at a cost of £120 million, after a test reactor operating in Scotland was found to have a small internal leak of radiation.
Mr Coaker said in the Commons, following the announcement: "Why now this statement?
"And why is the House only being told today?
"Do you not think it would have been right to brief the official opposition spokesman on defence then?
"Why didn't this happen and why hasn't it happened at any time since then until now?
"And shouldn't this Parliament have known earlier as well?"
Mr Coaker said the Government risked losing the public's confidence on its nuclear affairs if it failed to be "open and transparent", adding that no matter how inconsequential the fault, it remained an issue of "national importance".
He said: "There must be public confidence in the Government to be open and transparent on these matters.
"A fault, however small, that develops in a nuclear reactor is something that the British people and this house should have been told about.
"This is an issue of national security and national importance.
"It will cause particular concern in Scotland.
"When did the Scottish Secretary know?
"Did the Secretary of State for Scotland discuss this with the First Minister for Scotland and the Scottish Government?
"It would seem to me that it is incumbent upon the UK Government to inform and work with the Scottish Government on this matter."
Mr Coaker said while he appreciated Mr Hammond's candour over the last 24 hours, it had nevertheless "come rather late".
He said "the public confidence and trust on these issues is crucial and people should have been told earlier".
"There will rightly be anxiety about these matters and the British public need to be assured that everything is being done to resolve them and be confident that Britain's defence and security is paramount and will be maintained," he said.
"That is best done through openness and transparency."
Mr Hammond insisted that expert advice confirmed "there are no safety issues rising; that this incident scores as a Level 0 event on the International Atomic Energy Agency's scale; an event that requires no action and presents no risk".
Asked if he had kept the Scottish Government updated, he replied: "We'll see when we hear from the representative from the Scottish National Party whether it is going to be the case that they deal with this matter with a responsible and sensible point of view. Of course, key ministers in government were aware throughout of these issues."
SNP member Angus Brendan MacNeil said: "You should acknowledge that Scottish MPs and the Scottish Parliament have voted against nuclear weapons."
Asking Mr Hammond when he consulted his Scottish counterpart, he reminded him of the SNP's plans to rid Scotland of "weapons of mass destruction" in the event of securing an "out" vote in September's independence referendum.
Mr Hammond replied: "This is the man whose defence policy is based on being able to join Nato, an avowedly nuclear alliance.
"As I've said many times in this House, we do not expect the Scottish people to vote for independence and we are not planning for that contingency.
"However, as you would expect, the Royal Navy operates an extensive set of contingency plans for dealing with all sorts of contingent events that may occur."
But former Labour defence secretary Bob Ainsworth suggested that Mr Hammond was missing the point about the need to keep everyone notified.
"The fact that some people may react in an irresponsible way is, in my view, reason to be more open on this issue, not a reason to be less, as you appeared to be indicating in your reply to the shadow defence secretary."
Shadow energy minister Tom Greatrex (Rutherglen and Hamilton West) asked: "Given that the Scottish Environment Protection Agency (Sepa) is an executive agency of the devolved Scottish Government whether therefore Scottish ministers were informed by Sepa?
"And why, in fact, if that was the case, were Scottish ministers involved, but members of this House not?"
The Defence Secretary replied: "Sepa was informed in October 2012 and has been involved in the discussions since that point.
"Sepa is an executive agency of the Scottish Government, but it deals with operators in relation to the discharge of its regulatory functions on a properly regulated statutory basis and usually on a confidential basis. Clearly, Sepa did not feel that this event, as a Level 0 event, needed to be brought to the attention of ministers or anyone in the central Scottish Government."
Glasgow North West Labour MP John Robertson challenged the Government's "stupidity".
"The stupidity of this Government and the Scottish Government knows no bounds.
"The fact that they've known about this for almost two years, in the case of the Scottish Government, and over two years in this Government, is holding the people in this country in contempt," he said.
Mr Robertson said he had concerns that something should happen to "the people of my country, my city".
"Minister, you must go and tell people, otherwise there will be nobody who will believe anything you say about anything to do with nuclear."
But Mr Hammond accused Mr Robertson of scaremongering.
"I'm not sure about lessons on stupidity," he said.
"I'm afraid this is scaremongering of the worst kind. I have told you - and all the scientific evidence supports the position I have taken - there are no safety issues at stake here."
He added: "Level 0 events are not routinely made public, they are not routinely reported. That has been the practice of successive governments, that has been the practice across the civil and military nuclear sector."
Mr Hammond was supported by his Conservative colleague, former defence secretary Liam Fox, who said today's announcement proved that the system of checks was working.
"What, in fact ,we are seeing is a vindication of the safety models that have been followed by successive governments in relation to our nuclear submarine programme; there is certainly no excuse for scaremongering or irresponsible language."
He added: "In fact, I would go as far as to say to you that we should be proud as a country and reassured that safety is given such a high priority even at the cost, financially, that you have outlined today."