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If this report is to be believed, and it is very credible, our UK armed forces are steadily working their way towards being a Civil Defence Force armed with third rate weapons.

If this has resulted from the bonus culture within the MOD, the sooner the architects of this financial disaster are removed the better.

Certainly “open ended” contracts would never be the case in normal business and commerce.

MoD to slash jet fighter orders as it struggles to save aircraft programme

• Defence chiefs decide UK cannot afford current plan

• Cost of 140 US-built planes has risen by £25m each

The annual defence budget is about £35bn, not including the cost of operations in Afghanistan, which are running at about £4bn a year and are paid for out of the Treasury’s contingency fund.

Defence chiefs are preparing drastic cuts to the number of American stealth aircraft planned for the RAF and the Royal Navy’s proposed new carriers, the Guardian has learned.

They will be among the first casualties, with existing squadrons of Harrier and Tornado jets, of a huge shift in military spending being considered by ministers, officials and military advisers.

As they head towards their biggest and most painful shakeup since the second world war, a consensus has emerged among the top brass that they can not afford the 140 American Joint Strike Fighters (JSF) they have been seeking.

The JSF, or F35 as it is now called, has been subject to costly delays and the estimated price has soared from £37m each four years ago to more than £62m today.

One compromise would be for the Ministry of Defence (MoD) to halve its order from 140 planes to 70.

There is also a growing view that Britain will not be able to afford to build the two large aircraft carriers, already delayed, let alone the planes due to fly from them.

“The carriers are under real threat. There will certainly be a big reduction in JSF numbers,” a well-placed military source told the Guardian.

“The carriers are about more fast jets. They are very hard to justify,” added a defence official, referring to a growing consensus that the RAF already has too many fast jets.

If the order was halved, it would probably be split so that there was a short take-off and vertical landing (Stovl) version for the carriers, and a conventional version based at RAF ground stations.

Among other options being considered are: downsizing the second carrier to a much cheaper platform for helicopters, marine commandos, and unmanned drones; building both carriers but selling one, perhaps to India; and equipping them with cheaper catapult-launched aircraft.

No decisions will be made until after the general election. However, there is a consensus developing in the MoD that Britain simply cannot afford existing plans to build two large carriers in a project which, if the JSF planes are included, would cost an estimated £25bn.

The view is that it is extremely difficult to justify at a time when troops in Afghanistan are being deprived of helicopters and surveillance systems – including unmanned drones – which provide badly needed intelligence about what insurgents and suspected terrorists are up to.

The two proposed carriers, the Queen Elizabeth, due to go into service in 2016, and the Prince of Wales, due to follow in 2018, are already £1bn over the original estimated cost of £3.9bn. This excludes the cost of any aircraft flying from them.

The money spent on carriers and their jets is even more difficult to justify, say critics, at a time when the navy is getting six new frigates at £1bn apiece and a replacement for the Trident nuclear ballistic missile system, which ministers say could cost £20bn while admitting they do not know what the final figure will be.

A decision on the proposed new Trident submarine’s basic design contract – due last September – has been put back. “Further time has been required to ensure that we take decisions based on robust information,” the defence secretary, Bob Ainsworth, told MPs before Christmas.

The final cost of Trident could amount to £97bn over the system’s 30-year life, according to Greenpeace. The MoD has not challenged the figures.

What is likely to be a debate with much blood on the carpet was triggered last autumn by General Sir David Richards, soon after he became head of the army. “We cannot go back to operating as we might have done even 10 years ago when it was still tanks, fast jets, and fleet escorts that dominated the doctrine of our three services,” he said. “The lexicon of today is non-kinetic effects teams [carrying out 'hearts and minds' operations], counter-IED [improvised explosive devices], information dominance, counter-piracy, and cyber attack and defence.”

Richards warned that even large states such as China and Russia could adopt unconventional tactics rather than preparing for fighting with missiles and fixed formations of troops and armour. “Attacks are likely to be delivered semi-anonymously through cyberspace or the use of guerrillas and Hezbollah-style proxies,” he said.

The First Sea Lord, Admiral Sir Mark Stanhope, and Sir Stephen Dalton, the head of the RAF, have publicly challenged Richards’s argument, saying it is dangerous to assume the days of “state against state” warfare are over.

However, all agree that the defence budget is under unprecedented pressure. Malcolm Chalmers, professorial fellow at the Royal United Services Institute, estimates the MoD will have to cut its budget by up to 15%, and possibly more, by 2016. If future cuts fall disproportionately on capital projects then the MoD could be one of the hardest-hit departments after the general election, whoever wins it.

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