OTTAWA - Canada and Britain could make better use of scarce public dollars by collaborating on new warships, says London's top diplomat in Ottawa.

British High Commissioner Andrew Pocock said that with the economic crisis exerting pressure on defence spending everywhere, it makes sense for Ottawa and London to be discussing ways to co-operate on replacing aging frigates in their respective navies.

"We live in a much more financially constrained world. Every government faces a challenge in making its defence and other spending go as far as possible," Pocock told The Canadian Press in an interview.

"One of the ways to produce something that is greater than the sum of its parts is through genuine partnerships and collaboration."

Pocock said it was too early to discuss specifics of any collaboration, but the possibility of a joint frigate program is sending nervous ripples through Canada's struggling shipbuilding industry.

Last month, Britain's parliamentary secretary for defence, Gerald Howarth, told his House of Commons he was delighted that a "close discussion with the Canadians" was underway over the so-called Global Combat Ship program.

Since then, the Conservative government in Ottawa has said next to nothing about the talks, while the Defence Department has attempted to play down their significance.

Speaking publicly for the first time on the issue, Britain's envoy to Canada said his government was very interested in this form of transatlantic co-operation.

"I think at this stage it's still a sensitive and ongoing issue. There is Canadian interest in that sort of collaboration. There's certainly British interest. I think what we have to wait and see is: Are the terms right for both sides?"

Pocock acknowledged there were economic interests in both countries. He said the backdrop of the global financial crisis could not be ignored.

"There's a burden-sharing dimension. As well, as everyone's resources are stretched and tighter and likely to remain so in the foreseeable future, collaboration takes on particular importance for all partners," said Pocock.

"In terms of both defence equipment, defence co-operation, we need and want to work with partners. It's burden-sharing not quite in the old sense but in a new way."

Britain's BAE Systems Inc., is the driving force behind the shipbuilding program, and has also made overtures to Australia, Malaysia, New Zealand and Turkey.

The program has similarities with the controversial F-35 fighter jet program, in which American defence giant Lockheed Martin is co-ordinating a multi-country program to deliver the next generation of stealth airplane.

In Canada, the navy is refurbishing 12 of its 1990s era Halifax-class patrol frigates. They are expected to reach the end of their life expectancy around 2025.

Defence Department planners are working on a replacement ship, tentatively called the Single Class Surface Combat ship, which would see different types of warships built on the same hull design.

A frigate replacement program would form a major component of the Canadian government's new shipbuilding strategy, a 20-year, $35-billion plan designed to create jobs in two shipyards.

At least one union that represents Canadian shipyard workers has said the talks with Britain pose a threat to the Conservative shipbuilding strategy.

Public Works Minister Rona Ambrose told the House of Commons last month that the Conservatives remain committed to national shipbuilding.

Regardless of how the frigate replacement plays out, Pocock said British military co-operation with Canada would continue to be strong.

Britain and other allies welcome Canada's contribution of a frigate to the international flotilla for Libya and its efforts in the aftermath of last year's Haitian earthquake, he said.

"I don't sense at this stage that Canada is withdrawing from the world. It's been in Afghanistan -- still there -- and will replace combat forces with a military training team," he added.

"I think Canada is doing what it can to help in areas where there's real crisis."