The UK government should set up an arm’s-length company to buy the Harland & Wolff naval shipyard in Belfast as part of a drive to repurpose arms manufacturing towards producing green infrastructure, according to a report.

The study from the thinktank Common Wealth is launching what it describes as a “Lucas Plan for the 21st century” setting out how the UK’s military industrial capacity can be transformed into a supply pipeline for green energy, benefiting workers, communities and the environment.

As a first step it is calling on the government to set up a public, off-balance-sheet holding company – similar to GB Energy – to buy the Harland & Wolff shipyard in Belfast, which went into administration last month.

Mathew Lawrence, director of Common Wealth – the thinktank that first suggested a publicly owned energy company, a policy now adopted by Labour – said British manufacturing enjoys a set of “strategic niches” from aerospace to shipbuilding that could “power a green Industrial Revolution.”

Lawrence added: “An active green industrial strategy to reorient them toward the green industries of the future can provide greater economic resilience, retain Britain’s industrial capacity and contribute toward decarbonisation. In the process, it can build a more secure and equitable future.”

At least four of the UK’s naval shipyards – on the Forth, Lagan, Tyne and Mersey – already make products for the offshore wind sector. Spain’s state-owned shipbuilder Navantia is in talks to buy out Harland & Wolff but Friday’s report argues the UK government should step in and repurpose the skills of the workforce – including welding, fabrication and engineering – to power the green economy.

Report author Khem Rogaly said Harland & Wolff was just one example of where industrial military capacity can be redirected towards green industry.

“Under public ownership and with the right investment, the capacity and skills in Harland & Wolff’s historic yards should be directed towards the green transition to meet essential manufacturing gaps in offshore wind and provide long-term security for workers.”

The UK military industry produces an estimated 6m tons of CO₂ each year. The report argues that converting strategic sites to green manufacturing offers a pathway to reducing these existing emissions while developing green industries.

Karen Bell, professor of social and environmental justice at the University of Glasgow, said: “The UK arms industry is responsible for significant environmental and social harm but is often justified in the name of preserving national jobs. The Common Wealth report highlights that there are alternative employment possibilities in the form of decent, secure green jobs.”

Many of the workers in the Belfast shipyard are members of the union Unite. George Brash, the union’s regional coordinating officer, said Unite was talking to “all key stakeholders and the government with the aim of securing employment and investment at Harland & Wolff.”

He added: “This workforce has a vital role to play in shipbuilding but also in building the renewable energy infrastructure needed for a sustainable future. It is vital that these jobs and skills and the future of these shipyards are safeguarded.”

The shipyard manufactures ships used by the Royal Fleet Auxiliary, staffed by members of the RMT union. Alex Gordon, the RMT’s president, said the union backed the report which “emphatically supports our policy for an end to the ramping up of arms spending by UK governments.”

He added: “The best traditions of our trade union movement include working for peace and recognising that the working class and their families are always the main victims of war … the RMT campaigns for socially useful, well-paid, unionised jobs to replace investment in arms production, including a commitment to build a campaign for defence diversification on the principles of just transition, so that skills, jobs and the communities that depend on them are safeguarded.”