Fourteen north Tsing Yi shipyards say they want better compensation and a longer lease term before they will agree to move to a new site.
The yards have been fighting the Government's attempt to move them 200 metres west for two years.
They claim the new site is unsuitable for ship repair work and the move could put them out of business, jeopardising 3,000 jobs.
The yards' representative, Tony Chan, said: 'The Government claims that the new site is suitable for shipyard purposes and does not require reformation. Our engineering consultant's findings are to the contrary.' Mr Chan, managing director of Dorman Shipyard, claimed the Government had wrongly compared the new site with Tuen Mun Area 40 Shipyard site, which was used for building small boats such as sampans.
'The site requirements for ocean-going vessels and small boats are totally different,' he said.
Mr Chan said it would cost an estimated $2.5 billion to restart operations at the new site.
'We would have no chance of survival if we have to start over again because of the large sum of capital which we do not have and would not be able to obtain,' he said.
Preliminary inquiries had shown that banks were unwilling to grant loans for setting up businesses at the new site, which had only 15-year leases.
'As a result, this is just another way of telling us to end our businesses and disappear overnight,' Mr Chan said.
He claimed the Government's actions could destroy the shipbuilding and ship repairing industry in Hong Kong and greatly affect port operations.
If the 14 shipyards, which employed about 3,000 workers, were forced out of business, middle-aged workers would face great difficulties in getting new jobs, he said.
Mr Chan said the new site was unsuitable because there was hard rock material on the top and between five and 22 feet of marine clay which would have to be dredged before the site could be filled.
The Environmental Protection Department wanted the shipyards moved because it claimed noise levels were too high and were affecting nearby residents.
Mr Chan said the Court of Appeal had ruled that the yards could continue operations on condition they used noise screens and restricted use of metal hammers.
Mr Chan said shipyards relocated in the past had been given much better compensation packages and had even been allowed to use their land for other development.
He said the 14 shipyards were willing to discuss the issue with the Government.