The Yarrow shipyard on the Clyde said yesterday it was to cut 650 jobs from May onwards because of a shortage of orders, and more redundancies are to be announced in April.
The company, owned by GEC, warned that even if it gets a pounds 400m type-23 frigate order to be announced in the next few weeks by the Ministry of Defence, a "sizeable" number of the 650 redundancies will still go ahead.
The yard said the size of the planned second round of redundancies to be announced in April "will obviously depend on the outcome of the type- 23 competition," but several hundred more jobs are thought to be at stake.
Although the workforce of 2,900 is to fall whatever happens, the announcement was also seen as part of the jockeying for the type-23 order, with Vosper Thorneycroft, the Southampton shipbuilder, also in the running.
Yarrow is favourite for the order, and Vosper has issued grim statements about job losses if it fails to get the orders. Several hundred redundancies have been forecast. MPs for constituencies near each company have been lobbying hard at the Ministry of Defence.
Yarrow recently won orders for three patrol vessels for Brunei and for design of the proposed common new generation frigate, which the company said "guarantees the long-term future of the yard."
It has also won subcontract work on a gas carrier and tugs and is looking for fast ferries and other engineering work. The current workload includes three type-23 frigates, but only one remains to be launched and the first of the others will be commissioned in March.
A union official said he was seeking talks with Michael Forsyth, the Scottish Secretary, for help in securing the frigate order for Yarrow.
John Reid, Labour's defence spokesman, said: "These redundancies are the direct result of dithering and delay in the Ministry of Defence.
Mr Reid, who was outside the yard as the workforce came out, said: "It's obviously a disaster for Yarrow. Neither Yarrow nor Vosper Thornycroft can plan ahead. Neither workforce can have any security the way the Government is handling this. This is the third time they have postponed the decision on who has won the contract.
"This time around it is massive redundancies. If it is not announced within weeks, literally this month, it could mean closure. Both these firms are under intense pressure and the Government don't seem to understand either the economic or social urgency."