A report by the Defence Nuclear Environment and Safety Board says it cannot ensure Plymouth's six Trafalgar-class nuclear-powered submarines "remain safe". The "principal threats to safety" were a lack of money and a dearth of expertise, it said.
Trade-offs which were used to cope with shortages of reactor engineers and scientists by restricting their time ashore were becoming unmanageable, it added.
Board chairman Howard Mathers, said: "Looking ahead, I consider that sufficiency of resources, both money and staff complement, and the maintenance of a sustainable cadre of suitably competent staff (Royal Navy, MoD civilians and in industry partners) to be the principal threats to safety in the defence nuclear programmes in the medium term."
The 2009 report, which has just surfaced, goes on: "The judgment last year was that some areas were barely resourced to deliver their outputs (including safety), with a considerable load on a small number of key individuals. Whilst it was considered then that availability might be traded to 'remain safe', the current view is the space to do this is now eroded, with the resilience of the submarine enterprise under threat and even the ability to recognise this at risk."
A 14 per cent shortage of civilian safety experts – four points higher than in 2007 – plus a seven per cent shortage of submarine reactor engineers, who have been restricted to "minimum time ashore", were also highlighted.
The 2008 and 2009 reports from the board, which regulates military nuclear operations, were marked "restricted" but have been released under the Freedom of Information Act.
Campaigners said it was "unforgivable" if safety was being jeopardised by budget cuts while defence experts said the "desperation" of the MoD to keep key navy personnel could be judged by the worth of "golden handcuff" deals.
Ian Avent, from the Campaign Against Nuclear Storage and Radiation, said: "There are clear examples which prove their safety processes don't always work. The management processes aren't as good as they are on paper. If that is down to manpower and money shortages then it is unforgivable."
Naval expert Steve Bush, editor of the Liskeard-based Warship World, said problems with the retention of nuclear watchkeepers were long-standing.
The 2008 and 2009 reports reveal a deepening of concerns about the MoD's nuclear safety management.
Reports from 2006 and 2007, released two weeks ago, also marked a shortage of qualified staff and cuts in funding as major problems for the Royal Navy.
They also highlighted 11 "potentially significant risks" across Britain's nuclear licensed estate, including Devonport.
The reports also warned that attempts to minimise radioactive risks have been "weak", while safety analysis was "inconsistent" and change management "poor".
The MoD said it takes its nuclear responsibilities "extremely seriously" adding that "safety is our priority".