[attach id=408096 size="medium"]Press Association Graphic[/attach]

David Cameron yesterday dismissed concerns raised by the head of the US army about the impact of cuts on the capacity of British forces, insisting it remained a “very strong and capable partner” for the Americans.

US chief of staff General Raymond Odierno said he was “very concerned” about the falling proportion of national wealth devoted to the military and warned it could result in British units being forced to operate within US ranks rather than alongside them.

But Cameron insisted that President Barack Obama appreciated the contribution made by British troops who were able to fight alongside US forces “anywhere in the world”.

Ministers are under increasing pressure from Tory MPs and senior military figures to commit Britain to meeting the Nato target to spend at least two per cent of GDP on defence beyond 2016.

With deep cuts to Whitehall budgets to continue after May’s general election, Chancellor George Osborne is reported to have warned privately that it may fall below that level. The most senior civil servant at the Ministry of Defence said that the department would “clearly” like the Nato target to be met – although he said that it would be for ministers in the next government to decide.

He said that on current forecasts, GDP growth was expected to outstrip the growth in the defence budget, such that it would drop below two per cent at some point in the next parliament. He warned that further cuts in spending could ultimately affect the capability levels of the armed forces.

“It rather depends on how deep the cut is and how much further financial efficiency we can drive. If it were to be more than the level of financial efficiency we can drive, then yes, it will impact on capability,” he said.

We have second largest armed forces in Nato

Speaking in Colchester, the Prime Minister said the UK’s defence budget was the fifth largest in the world and second only to the US in the Nato alliance.

He said: “You can see that very specifically today in Iraq, where the second largest contributor in terms of air strikes and air patrols is Britain by a very large margin.”

He said that the current equipment programme, including two new aircraft carriers, the Type 45 destroyers, and the Joint Strike Fighter would ensure the UK would continue to have “some of the most capable armed forces anywhere in the world. In terms of spending, the promise we have made is that the equipment budget, which is £160 billion over the next decade, that will grow by one per cent in real terms in each year of the next parliament.”

Also we have said we don’t want to see further reductions in our regular armed forces. So we have that commitment: second largest in Nato, fifth largest in the world. And as for working with the Americans, I know because I spend time with President Obama and others, how much they appreciate the fact that Britain is a very strong and capable partner and able to fight with them, when it’s in our national interest, anywhere in the world.”

In a sign of the pressure on Cameron over the military budget, former defence secretary Liam Fox said he and fellow Tory MPs would find it “hard to swallow” if the Prime Minister allowed spending to fall below the two per cent Nato threshold while maintaining a pledge to spend 0.7% of GDP on aid.

In an intervention bolstering those who seek a manifesto commitment to maintain resources above two per cent, Gen. Odierno told The Telegraph: “In the past we would have a British Army division working alongside an American division. Now it might be a British brigade inside an American division, or even a British battalion inside an American brigade.”

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