The Ministry of Defence has denied blocking celebrations to mark the 200th anniversary of the Battle of Trafalgar.
HMS Victory is the oldest commissioned warship in the world
The Daily Telegraph claimed ministers were opposed to Royal Navy plans for a gathering of warships at Portsmouth, due to duties in the Gulf and costs.
An MoD spokesman said the Navy would put forward its final plans for the 2005 celebrations in Easter next year, but "financial scrutiny" was a factor.
Lord Nelson led the famous victory in 1805 against French and Spanish fleets.
The First Sea Lord, Admiral Sir Alan West, wants to bring together warships from around the world, including French and Spanish vessels, for what would be the centrepiece of the bi-centenary celebrations, the Telegraph said.
Other celebrations could feature a parade through Trafalgar Square and the Navy is negotiating with Spain about sending a warship to Cape Trafalgar to lay a wreath and have a gun salute.
A spokesman for the MoD said: "A committee has been set up to look at a number of different ideas and suggestions.
"These celebrations have got to be funded and financial scrutiny is important to ensure that public money is used most effectively."
He said the Navy was likely to submit its final plans by Easter next year.
The Battle of Trafalgar in 1805 is widely recognised as the Navy's greatest victory, won at the cost of the life of its greatest hero, Vice Admiral Lord Nelson.
The victory against the combined fleets of France and Spain established Britain's supremacy at sea and freed the country from the long-held fear of invasion from Napoleon's armies.
Nelson died in the battle after he was shot in the back by a French marksman as he stood on the quarterdeck of HMS Victory.
The ship, which lies in a dry dock at Portsmouth naval base, is the oldest commissioned warship in the world, and is still manned by Officers and Ratings of the Royal Navy.