George Robertson's decision, following a six-month strategic review, will dismay many Labour MPs and disappoint some ministers, who are seeking more money for health and education in the Treasury's comprehensive review of spending.
Ministerial colleagues have told The Independent that they expected defence to be cut to fund higher spending elsewhere. But Mr Robertson is said to have the backing of Tony Blair and Peter Mandelson against any attempt to raid his budget.
Friends of Mr Robertson said Clare Short, Secretary of State for International Development, also supported the case for continued defence spending. "Clare takes the view that there is still a case for a strong force in order to meet the peacekeeping duties," said a source.
Mr Robertson will tomorrow underline the need for powerful defence forces by setting out plans for extending their role to "defence diplomacy and conflict resolution". He will use the Winston Churchill memorial lecture in Luxembourg to advance the case for using armed forces to prevent conflicts, and for Britain's military strength to be used in new, more constructive ways in future.
The new role will not come cheaply, Mr Robertson will make clear when he submits his plans to a cabinet committee. He will tell colleagues that he will be making cuts in some areas of defence, including forces in Germany, but will insist on keeping the savings for new defence contracts for helicopters and ships - possibly to include two new aircraft carriers. He plans to cut the defence reserve forces, and withdraw troops and tanks from Germany in order to spend more money on beefing up the air and sea-lift capability.
Tanks could be mothballed near ports as part of a "park and fight" strategy. The out-dated Cold War strategy of fighting a frontal tank attack across Germany will be abandoned, but not all the tank forces will be withdrawn, to underline Britain's continued commitment to European defence with the US through Nato.
The Tory defence cuts slimmed down the armed forces in their existing roles, but Mr Robertson is planning a radical shift to a more mobile, hard-hitting force. He will tell cabinet colleagues that in order to sustain the forces in areas such as the Gulf, he needs more back-up capability. "The Tories kept saying they were cutting the tail without blunting the teeth, but it was a false analogy. They were cutting the lifeblood of the forces," said a source.
Britain will go ahead with the Eurofighter project, in spite of Treasury opposition, and keep its nuclear commitment, but the Government is to wipe out a quarter of Britain's nuclear defence force tomorrow to honour Labour's election promise on disarmament. The Ministry of Defence said that all the outdated RAF freefall WE-177 N-Bombs will be removed at midnight, leaving the Trident submarine fleet as Britain's nuclear force.
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