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 has two decades of orders on its books, including patrol vessels such as HMS Medway.

But 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 the ship.

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?

“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, bBoth 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 the company 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.