Clarke puts squeeze on defence

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Chancellor Kenneth Clarke is pressing the Secretary of State for Defence, Michael Portillo, to postpone multi-billion-pound orders, putting thousands of jobs at risk as part of a squeeze on public spending to be endorsed by Cabinet today.

Senior Tory backbenchers have been warned that the Treasury is seeking delays in the major procurement programmes for two new missiles, including a "tank-busting" weapon, and has held up a decision on the pounds 2bn replacement for the Nimrod maritime patrol aircraft.

The MoD is still hoping to announce an order for about 25 aircraft to replace Nimrod before MPs leave Westminster next week for the summer recess.

But Tory backbenchers believe other orders will fall victim to cuts in defence.

Cabinet is expected to try to bring spending below pounds 268bn - the planned total for next year - and the Prime Minister, John Major, is determined to protect key public services in education and health in the run-up to the general election.

That makes Mr Portillo's pounds 21 million defence budget one of the prime targets in Treasury's battle to pave the way for tax reductions in November's Budget.