MPs have urged the UK to build more warships to protect the country against an "increasingly hostile and unpredictable international environment".
It comes after a report, released by the Commons Defence Select Committee, concluded the Government's refusal to spend money on the Royal Navy's "needs has literally spoiled the ships".
The MPs also warned the service was "too small and too specialised" to face the threats which will be levelled over the next 20 years – including from Russia and China.
Tobias Ellwood, chair of the Defence Select Committee, said the Royal Navy "needs more ships, armed with more lethal weapons and the most up-to-date technology".
"We have the shipyards and the know-how to build them: the Government just needs to place the orders and give UK shipbuilding the commitment and confidence it needs to deliver," he said.
The report concluded: "Government's failure to fund the ha'porth of tar the Royal Navy needs has literally spoiled the ships."
This refers to an ancient saying which warns of spoiling a large or important piece of work because of the refusal to spend a small amount on one aspect of it.
The report also said budget cuts had meant slow procurement and, when ships were completed and got to sea they acted "like porcupines – well-defended herbivores with limited offensive capabilities".
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It added the UK was increasingly reliant on its allies for support, with experts warning the Navy could be needed in the future to fight for control of the sea or deny adversaries access to UK waters.
"The Royal Navy will be asked to do even more with even less," the report said.
"This is a clear risk, which those beyond these shores can calculate just as readily as we can."
The report also warned a new £250m "national flagship" would add an "ongoing pressure on an already constrained naval budget" – with an initial cost of £200-250m and £20-30m a year running costs.
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The flagship is expected to replace the Royal Yacht Britannia, however MPs warned the ship would bring no advantage to the Navy.
The report also warned that, currently, the Navy would not be able to meet the aims of the Government's foreign policy shift in the Integrated Review released earlier this year, in which it has a "potentially leading role".
"It needs more lower-end, adaptable vessels, like the planned Type 31 frigate," the report said.
It also said when compared to peers and adversaries, the Royal Navy was not as well-equipped in weaponry.
"Of all the services, the Government is most ambitious for the Navy," Mr Ellwood said.
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"However, if the Government does not deliver the ships and capabilities the Navy needs, that ambition will be holed below the waterline."
A Ministry of Defence spokesperson said the UK is "on track to becoming the foremost naval power in Europe – a carrier deployment and ships operating in several oceans showcases the best of Global Britain".
"This report rightly identifies the judgments the Service must make to deliver new classes of ships, submarines, innovative weapon systems and technologies.
"Investment in Royal Navy shipbuilding will double over the life of this Parliament to more than £1.7bn a year.
"As a consequence, the Royal Navy's tonnage is projected to grow by more than 40% from 2015-2030.
"We will consider the committee's report and will respond in due course," the spokesperson added.