The Government's plans for an eight-ship Naval Service may be scaled down just months before the delivery of a £20 million vessel. One existing ship may have to be tied up to provide crew for the new craft.
So severe is the staffing shortage that the oldest vessel, the LE Deirdre, may have to be decommissioned two years earlier than planned.
The new ship, under construction in north Devon, will require a crew of 44 when it puts to sea after trials in September. The "use-by" date for the Deirdre is 2002 but this could be extended, given that it has been refitted under an EU-funded fleet renewal programme.
The Naval Service is still losing more than it is employing in a highly-competitive labour market. Two of the nine watchkeepers headhunted abroad - mainly from Britain - last year are quitting already.
The service has lost 46 members since the new year, and it is expected that it will have difficulty in holding on to 40 recruits enlisted since then.
The Department of Defence has said that there were 108 applications for 65 additional places, but it has refused to pay for a recruitment advertising campaign.
In a hard-hitting statement this week the Nautical Institute blamed the Government for a "haemorrhage" of existing trained personnel out of the service, and a reduction in new recruits.
The institute, which represents both mercantile and naval officers, has also accused the Minister for Defence, Mr Smith, of rejecting an opportunity to "enhance the status, morale and training" of the service by turning down the US invitation to a forthcoming Partnership for Peace (PfP) maritime exercise in the Baltic.
The Minister said acceptance would have been inappropriate, taking into account fishery protection requirements and the current debate over Irish membership of the PfP.
Commander Jim Robinson, the chairman of the institute's Irish branch, told his annual general meeting in Dublin that the Minister's decision to reject the invitation was to be regretted.
An opportunity to exercise search-and-rescue procedures, drug interdiction, pollution control, disaster relief and exclusion zone enforcement with other European navies and the US Coast Guard had been let pass by, he said.
Commander Robinson added that successive reviews of the Naval Service over the past decade had left the service "reeling", and the most recent report had, to all intents and purposes, been put on hold.
