THE political feud between Edinburgh and London sparked by the 800 job losses on the Clyde escalated last night, as the two governments clashed over whether UK warships would ever be built in an independent Scotland.

As Govan and Scotstoun workers contemplated an uncertain Christmas, and demonstrators rallied in Portsmouth against the loss of 900 more jobs at the town's historic shipyard, Deputy First Minister Nicola Sturgeon and Scottish Secretary Alistair Carmichael attacked each other's positions in the referendum.

Carmichael restated the Westminster line that a rump UK would not order its Type 26 frigates from an independent Scotland when it could give work to people south of the Border instead.

He called on Sturgeon to admit she was wrong for saying the Clyde would get the T-26 work.

Sturgeon called his position "shameful".

The SNP claim that Portsmouth's closure would leave the Clyde as the default site for rUK warship orders, including the T-26.

But the SNP's opponents argue that Portsmouth is not closing overnight and its gradual wind-down in 2014 means it could yet be resurrected for the T-26 after a Yes vote.

BAE Barrow, currently used for submarines, could also be adapted, unions claim.

Writing in the Sunday Herald today (page 8), Carmichael says the UK Government currently placed warship orders with BAE in Scotland by using an opt-out from EU competition law called Article 346.

This allows states to do what it is necessary to protect their own self-defined "essential security interests", and is used to place defence orders directly with home companies.

He said the SNP claim that the rUK would be almost certain to hand warship orders to a foreign Scotland was therefore "completely untrue". He said: "Where work is not conducted under the Article 346 exemption it must go out to tender. In an international market many countries are able to produce at a lower cost."

But, also writing in the Sunday Herald today (page 9), Sturgeon argues that there is nothing in Article 346 which would force Westminster to put the contract out to tender rather than sticking to the BAE deal.

She said: "If the UK Government awards a contract to BAE and BAE wishes to build the ships in its Clyde yards, nothing in Article 346 stops that from happening."

According to evidence given to the House of Commons Defence Committee in June, both sides are right on Article 346.

However, if the final decision on where the rUK ordered its ships is ultimately a political one, most observers expect the rUK would naturally favour rUK yards over those in Scotland.

Professor Trevor Taylor, of the Royal United Services Institute, told MPs: "Article 346... does not require you to compete your contracts and it does not require you to place a contract in your own country if you choose not to compete it. Technically, you might be able to place a contract in Scotland under 346 - perhaps ... [but] I don't think the [UK] Government currently are offering the prospect of any favourable terms as far as defence procurement from Scotland is concerned."

Carmichael said: "Nicola Sturgeon is looking pretty isolated on this. The best thing she could do is admit that she is wrong.

"Is she telling us that the people who build the warships and the people who place the contracts know less about this than she does?"

Sturgeon responded: "Alistair Carmichael's shameful behaviour of recent days shows he is failing in the most basic job of any Scottish Secretary, which is to stand up for Scotland and for Scottish jobs.

"Does he support this work staying on the Clyde whatever the result of next year's referendum or is he actively engaged in undermining the future of one of our great industries?"