Navy bosses are said to be in uproar over reported plans to mothball nearly half of the Fleet and close a key port. Six warships - Cumberland, Chatham, Cornwall, Campbeltown, Southampton and Exeter - are considered to be under threat. According to the Daily Telegraph, cuts have been drawn up which are intended to slice £250m from the defence budget.
The paper has also claimed the Navy could lose one of its three aircraft carriers, Invincible, and that one of three major ports was under threat of closure - with Portsmouth the most vulnerable.
It quoted one senior officer as saying: "We are now no better than a coastal defence force or a fleet of dug-out canoes.
"The Dutch now have a better navy than us."
Last month, Armed Forces Minister Adam Ingram said 13 of the Royal Navy's 44 main vessels were already in a state of reduced readiness - known as mothballing - to save cash.
A decision to mothball the other ships would mean that almost half the Fleet would not be available.
The Ministry of Defence spokesman said: "We currently have no plans to cut ship numbers.
"We routinely review whether resources are allocated where our frontline forces need them most. No decisions have been taken in this case."
He pointed out that the MoD was building new destroyers, attack submarines, and support ships for the Royal Navy and planned to sign the production contract this year for two new aircraft carriers.
The spokesman branded reports that Portsmouth will close as "complete speculation", adding: "We are reviewing our bases, and have undertaken to make savings, but no decisions have been taken."