The leader of Barrow council says the owners of the town's shipyard should develop it, or sell up.
The BAE Systems yard in Barrow is a major local employer
BAE Systems plans to end surface shipbuilding at the yard to concentrate on submarines and consolidate its work on the Type 45 Destroyer frigate programme into its Clyde shipyards.
The company has said it will also create a separate business unit to run its submarine design offices at the Barrow yard.
Barrow council leader Terry Waiting said that if BAE is not interested in the yard, it should leave the way clear for shipbuilding companies who do want to create work there.
He told BBC Radio Cumbria: "BAE Systems have said they are going to concentrate solely on submarine building and, if that is their intention, that is the death knell for surface ship building in Barrow-in-Furness.
We have to do everything we can to make sure we don't lose the capability for surface ships
"I'm not telling the how to run their business... but if that is their intention, they should let the shipyard be owned by someone who is really interested in shipbuilding and has the well being of the yard, the town and the industry at heart.
"We are in a country that is an island that no longer has the capability to build commercial ships. We must be a laughing stock to the rest of the world
"If everything is lost with the Type 45, we still support BAE Systems, we still support the submarine section and we will still support the workforce in Barrow.
"But we have to do everything we can to make sure we don't lose the capability for surface ships
"It is our heritage."
BAE Systems said it has no plans to sell off or close the shipyard.