The move was widely seen as buying time before deciding how to allocate refitting work on Trident submarines, adding to the conviction that the Government is frightened to make a decision.
Anger and frustration greeted the announcement. It does nothing to relieve uncertainty over employment prospects in the two yards, which are economically vital to their respective areas. The Ministry of Defence concedes that many jobs will go in whichever yard is not chosen for the Trident work. Devonport, in Plymouth, has 5,500 employees and Rosyth, on the Firth of Forth, has 4,200.
The MoD said yesterday that two dockyards were needed to ensure competition to keep prices down. Navy and industry sources believe the real reason is that the Government dares not close one. Closing Devonport would have catastrophic consequences for the South-west, while shutting Rosyth would have similar consequences for South-east Scotland.
The Navy believes there is too much ship and submarine refitting capacity for the small fleet. Devonport could do it all on its own; Rosyth probably could not. By closing one yard or the other, it might save up to pounds 400m over the next 10 years - enough for two commando helicopter carriers.
Malcolm Rifkind, Secretary of State for Defence, said he was not yet confident of the prices quoted by Devonport Management and Babcock Thorn, the government-owned company operators for Devonport and Rosyth, for developing facilities for refitting the nuclear-armed submarines.
'We are at present concerned that the prices quoted in the offers may significantly understate the likely eventual cost of the work,' he said in a Commons written answer. 'We shall be scrutinising these offers and studying other related matters further before coming to a final decision, which we hope to do as soon as possible.'
Mr Rifkind said the scope and nature of nuclear refitting was such that it must be allocated to one dockyard. But he emphasised that the Royal Navy would have a continuing and substantial programme of refit work for its surface fleet of frigates, destroyers, carriers and other vessels.
'Although the private shipbuilders can and will continue to do some refit work, they of themselves cannot ensure effective competition. It is through competition that refit prices will provide the best value to the Royal Navy and protect the taxpayer.'
But the dockyards doubt there will be enough to go round. The economics are finely balanced. At Devonport, for example, the costs of refitting the Trident ballistic missile-firing submarines are reduced because it also handles routine dockings of nuclear attack submarines. Without Trident, it may be cheaper to dock the attack submarines at Faslane.
Because the facilities would then be underused, it would also be more expensive to refit frigates and they might be refitted at Portsmouth instead, making the dockyard uneconomic to run. Rosyth is similarly balanced.
Peter Whitehouse, of Devonport Management, said: 'It's a downward spiral. Our concern is not just about the uncertainty these excessive delays cause to everyone in the workforces and communities. Our customer the Royal Navy needs this decision in order to achieve the savings it is required to show.'