George Robertson, Secretary of State for Defence, said that during the next six months, the review - Britain's Defence. Securing our Future Together - would examine the pounds 22bn defence budget to offer the armed forces "a new sense of clarity, coherence and consensus".
He ruled out scrapping Britain's nuclear capability but also poured cold water on prospects of increasing spending on defence. The key points underpinning the review are co-operation with the United States, European and other allies; security based on collective defence via Nato; and an approach based on strong conventional forces backed by a national nuclear deterrent.
The Defence Secretary's announcement marked an early move by the Government to act on its manifesto pledge to hold a review which would "consider how the roles, missions and capabilities of our armed forces should be adjusted to meet the new strategic realities".
He said: "Since the end of the Cold War, the security risks to the United Kingdom, and to our allies, have changed fundamentally. We no longer face a threat of general war in Europe. But new security challenges confront us, including the proliferation of weapons of mass destruction, aggressive nationalism, and international terrorism. We must ensure that Britain is ready to face those challenges."
Mr Robertson said the exercise would be foreign policy-led and would not be an "in-house exercise". Using the US as an example, he said Britain's defence policy should be a national consensus. He and Robin Cook, the Foreign Secretary, will hold two open seminars in coming weeks to establish a baseline policy for the review. He will also set up a panel of experts to feed views into the process, and arrange for opposition parties and parliamentary defence committees to be involved.
"This review gives us a unique opportunity to produce a non-partisan approach to Britain's defence in the next century," Mr Robertson said. "I do not want this to be Labour's Strategic Defence Review; I want it to be Britain's Defence Review."
If Mr Robertson means what he says, the Government intends to reappraise Britain's role in the world. But it cannot escape the fact that this is the third major defence review in 10 years. Following Options for Change and Front Line First, the Government either has to make more fundamental choices - abolishing Britain's commitment to large-scale, high-intensity - first-division war, relegating the British Army to a second-division gendarmerie, and possibly scrapping hugely expensive defence programmes like the four-nation Eurofighter project which is expected to cost Britain pounds 15.4 bn.
The previous Government committed Britain to building 230 Eurofighters, and the new Government remains committed - so far. Alternatively, the Government might give this up but still try to retain Britain's current ability to punch above its weight in the world arena - which Mr Robertson praised yesterday.
"There are very few international conflicts where people don't want British troops there", he said.
On spending, Mr Robertson conceded that there were equipment shortfalls and manpower shortages but no prospect of more funds overall.
"I don't think it is realistic to say that, in the present strategic circumstances, defence spending is going to increase. What we have to do is to work out how best to spend what it is we are spending at the moment."
He also warned that Britain's armed forces had to be prepared for a new era of international terrorism.
One area where there have been suggestions that Britain could reduce commitments is in Germany. Mr Robertson said no decisions had been taken yet, but there was little point in having a strategic defence review if options were not to be considered.
The plans prompted an angry response from shadow defence minister, Nicholas Soames: "Tony Blair said we needed a period of stability and serious reflection. Instead, they are rushing headlong into a strategic defence review. The only possible conclusion you can draw is a smaller budget and all that goes with it. A diminution of Britain's role in the world."
However, former defence procurement minister, Alan Clark, broke ranks by describing the plans as sensible. "The review is needed," he said.
The main aims
Some of the key areas to be reviewed:
Peace-keeping forces: The Prime Minister has declared his commitment to humanitarian causes around the world. The review will look at how many are on patrol, where and how easily troops can switch to all-out warfare.
Light forces: The spotlight will fall on Northern Ireland and how to increase assistance for troops in the province.
Nuclear deterrent: Mr Robertson has ruled out scrapping Britain's nuclear capability which means no unilateral disarmament. The review is expected to look at a possible closer role for Britain in future talks with Russia and the US over nuclear arms.
Foreign outposts: Britain's troop numbers abroad will also come under close scrutiny.Reuse content