The federal government will proceed with a $700-million plan to retrofit an interim navy supply ship at Quebec's Davie Shipyard. The deal was put in jeopardy two weeks ago when the Liberals put it on hold for 60 days while they re-examined the initial contract.

The government's massive $39-billion national shipbuilding procurement strategy is in need of repair, with costs for some projects soaring by as much as 181 per cent and others on the cusp of being cancelled, according to briefing materials prepared for some Liberal ministers.

Yet another Canadian shipyard has written to the government asking for a competition in a now controversial plan to have a civilian cargo ship converted to a supply ship and chartered to the navy.

The association representing Canadas shipbuilders has taken the extraordinary step of chastising a key Canadian shipyard for allegedly overstating its case in a growing spat over a government ship contract.