The engineering firm, which has bases in Burntisland and Methil in Fife, and Arnish on the Isle of Lewis, has failed to land contracts for offshore wind farms, and faces a bleak future.
And Tuesday’s announcement that it could not give a £30m contract guarantee under existing state aid regulations sparked a furious reaction from unions.
The STUC said it was “another door has been slammed on the face of Bifab’s workers.
Dave Moxham, STUC deputy general secretary said: “The Scottish Government trumpets its support for ‘Fair Work’ and ‘workers voice’ at every opportunity.
“But when it comes to key issues such as the future of hundreds of workers at BiFab they shut up shop and conspire with the Tories to keep Scottish workers out of the picture.”
The furious reaction followed the announcement by Fiona Hyslop, the Scottish government's economy secretary, that its hands were tied.
The Scottish Government - a minority shareholder in BiFab - and the UK Government have said they cannot give a £30m contract guarantee under existing state aid regulations.
They said they had to look at other ways to secure the yards’ future.
Ms Hyslop said BiFab’s situation was “a culmination of a number of issues” and said the main one was what she described as “the unwillingness of the parent company and majority shareholder” JV Driver to provide finance for the company.
She said the Scottish Government had left “no stone unturned” in its search to secure the yards’ future.
But the response from union leaders was one of anger.
Gary Smith and Pat Rafferty, joint union secretaries with Unite, said: “Until the Scottish Government publishes the legal advice over its decision to walk away from BiFab, all the difficult questions remain unanswered.”
They also hit out at the way the announcement was made, saying their members found out about it via the media, adding: “It makes a mockery of the so called fair work agenda.”
Further criticism came from Alex Rowley MSP, Labour (Mid Scotland and Fife) who said: “This is devastating for Scotland and should not be accepted.”