Devonport Dockyard is planning to ship nuclear reactors from redundant submarines to the Dounreay nuclear plant in Scotland.
Mooring spaces for decommissioned nuclear subs are limited
Dockyard operator DML has come up with the outline proposal following protests by anti-nuclear groups at Devonport.
It said last month that Devonport would not be used for storage of reactors, but it has not come up with an alternative until now.
A DML spokesman confirmed the outline proposals which would mean extending the Vulcan nuclear reactor testing station at Dounreay, on the north coast of Caithness.
The Ministry of Defence (MoD) is also considering proposals from three other firms for the lucrative business of storing radioactive parts from decommissioned vessels.
The Ministry of Defence is expected to make a decision on the bids by August 2005 and start the new storage procedures in August 2006.
DML, which is licensed to decommission all the Navy's nuclear submarines, declined to go into further details on its plans, apart from saying that transportation of the 700-800 tonne reactors would be by sea.
The MoD is facing a growing problem of where to store the reactors as the number of decommissioned nuclear submarines continues to rise.
Devonport currently has four, and Rosyth in Fife has seven. All will have to be dismantled to remove the reactors, which will be defuelled before transportation.
The concern is that more of the 16 nuclear submarines still at sea are coming to the end of their lives and by 2012 there will be no mooring space left.
Community groups and councillors from Rosyth and Devonport are meeting on Saturday and Sunday at Lancaster University as part of the MoD's public consultation on the issue.