"We’re very concerned," Jason Carley from the association told Forces News.
"The new rules would affect predominately the commercially operated Dunkirk Little Ships which tend to be the largest.
"They don’t make sense to operate in private hands. So they’re often operated in giving tours on the river.
"If those Little Ships essentially have to be completely rebuilt then, we don’t think for those owners it’s going to make economic sense which probably means they’ll end up rotting away in a shipyard somewhere."
Mr Carley estimates that between five and 10 out of over 100 operational vessels could be at risk. Most are large and privately owned.
“At this stage to lose what could be 5 or 10% of the fleet of all Dunkirk Little Ships that still survive would be a real tragedy,” he added.
Mr Carley says he is still “hopeful” that an exemption can be given to the Little Ships:
“Just like we make some allowances for the Battle of Britain memorial flight from an aviation point of view, we do think it’s reasonable to give some consideration to the Little Ships and we hope that will be taken into account as part of this consultation.”
A spokesperson for the Maritime and Coastguard Agency (MCA) said: "The MCA review into the safety standards to be applied to older passenger vessels considered standards for commercially operated passenger ships with more than 12 passengers.
"We would like to reassure people that the vast majority of the Dunkirk Little Ships do not fall into this category.
"Indeed only four (out of 198) ships have been identified as being potentially affected by the proposals.
"The nature of the review has meant that historic and heritage commercial passenger ships have been included in the consultation.
"The UK passenger ship regulations do contain provisions for exemptions to be granted, however these exemptions are generally conditional on a number of aspects which can include operational restrictions.
“We recognise that certain ships have intrinsic historical value and form an important part of UK maritime heritage.
"That said, we cannot make a wholesale exemption for historic ships as a group, particularly noting the diversity of the UK fleet.
"However, any future exemption request put forward by one of the Dunkirk Little Ships (or indeed any other historic passenger commercial ship) would be looked at on its individual merits, on a case by case basis."