The shelving of plans to privatise the search and rescue helicopter service is a chance to put safety before money, says Anglesey MP Albert Owen.
The deal would have included the MP's local RAF base at Valley, where Prince William is a pilot.
The plans were suspended and Ministry of Defence Police are investigating how preferred bidder Soteria had access to commercially sensitive information.
Plaid Cymru said it remained concerned about the "privatisation agenda".
The UK government had proposed replacing both military and coastguard search and rescue helicopters with a private consortium.
Irregularities in the bidding process have been blamed for the scheme being scrapped.
There was speculation in January that Prince William could have intervened over the helicopters' future after Prime Minister David Cameron told the Commons he had been lobbied by people "from all walks of life, if I can put it that way".
Mr Owen said the money that had been invested in Valley as an RAF base, and its location, made it strategically important in whatever service that was provided.
He said: "I was not a great fan of any sort of privatisation but I understand the need to update.
"What we need now is certainty. There has been a lot of investment at RAF Valley and I want that to remain."
He criticised the collapse of the privatisation plan after negotiations taking "taking years" only to "get messed up".
He said: "That's not the way we should be planning search and rescue, which is why I would like it taken out of the frame of privatisation and real investment go into it.
"We're talking about the lives of people on land and sea.
"Let's not put private money into this, and competition, as the basis. Let's put safety as the basis, let's put expertise as the basis."
Plaid Cymru MP Elfyn Llwyd said: "I remain very concerned about the UK government's privatisation agenda - their reckless plans to selling off the search and rescue services were dangerous to begin with.
"We do need to ensure that we have modern equipment and effective helicopters to carry out operations - but I fear that by privatising off this essential service, corners will be cut in order to make a profit," he said.
"The UK government must now promise to stop plans to sell off this life-saving, vitally needed service - or we risk selling off on the cheap in order to make a quick saving and lives will be put at risk."
Soteria is a consortium comprising the Canadian Helicopter Corporation (CHC), Thales, Sikorsky and the Royal Bank of Scotland.
It was chosen as the preferred bidder for the Search and Rescue Helicopter (SAR-H) project in February 2010 and proposed to run the service with Sikorsky S92 helicopters.
In a statement, it said: "Soteria is disappointed to learn that the UK government has announced the cancellation of the SAR-H program.
"We remain confident that Soteria was designated as the preferred bidder for the SAR-H programme as a result of the value, expertise, dedication, excellence and exceptional technical solution that Soteria can provide in leading search-and-rescue efforts across the UK.
"Soteria is evaluating the government's decision and if given the opportunity is confident that it is capable of delivering the SAR-H program and stands ready to work with the UK government."
Prince William completed his search-and-rescue helicopter training at RAF Valley last year and took up his post as a Sea King pilot last September.