A report in today's Times says ministers want to cut the TA from 57,600 to about 40,000 to increase the number of full-time soldiers by between 2,000 and 3,000.
It is thought that any savings accrued from reducing TA numbers would be ploughed into building support regiments such as signals, engineers and logistics, which were hardest hit by the Frontline First cuts in 1996.
With the Cold War at an end, military planners are now questioning the importance of a force whose intended role was to reinforce regulars in a conflict in central Europe.
Each TA battalion costs pounds 3m a year to run, money which ministers may prefer to spend on the regular army.
An MoD spokeswoman said last night that, like all other sections of the military, the TA, which was formed in 1908, was being looked at as part of the strategic defence review. No firm decisions on cutbacks and spending have yet been made, but she said restructuring was being examined.
"The future role of the Territorial Army is being considered as part of the defence review," she said.
"But to say it is being cut by a certain number is simply speculation as no decisions have been made yet. The aim is to have a capable and well- equipped force which reflects its role in the modern world."
The Treasury would be particularly interested in properties which may be freed by a smaller TA. Its headquarters, for example, is situated at the Duke of York's barracks in Chelsea, west London. Cuts would leave valuable buildings and pieces of land which could be sold.Reuse content