Cameron condemns 'leaky' defence department

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David Cameron slapped down his Defence Secretary Liam Fox yesterday for running a "leaky" department as the Government was embroiled in a "spin row" over its big cuts in defence spending.

The Prime Minister took a sideswipe at Mr Fox, whose letter to him warning about "grave" consequences from "draconian" defence cuts was leaked at a sensitive time during the spending review.

"That department does seem to have had a bit of a problem with leaks, which is worrying when it is the department responsible for security," Mr Cameron told the Liaison Committee of senior MPs during his first grilling by it since becoming Prime Minister. He said leaked letters did not help the review by adding to the public pressures, but believed that Mr Fox's strongly worded protest did not have a "huge impact".

Mr Cameron angered some of the MPs by admitting the Government may have urged the heads of the armed forces publicly to defend the decision to axe Britain's Harrier jet fleet. He said he "would not be at all surprised" if Downing Street had played a role in instigating a letter they wrote hitting back at a group of former service chiefs who criticised the decision to keep the Tornado fighter bombers rather than the Harriers.

Andrew Tyrie, chairman of the Treasury Select Committee, said: "I would find it unacceptable if it turns out that No 10 did prompt the chiefs of staff to enter political controversy in that way." It is understood that it was Mr Fox's idea to persuade the service heads to endorse the Cabinet's decision. No 10 was informed about the plan.

The Prime Minister also found himself at odds with Mr Fox over whether the decision to delay a decision on renewing Britain's Trident nuclear missile system until 2015 would save or cost money. Mr Cameron told the MPs the move would save £3bn over the next 10 years. But Margaret Hodge, who chairs the Public Accounts Committee, said the decision would cost up to £1.4bn – a figure volunteered to MPs last week by Mr Fox, who said keeping the ageing Vanguard submarines in service until 2028 would increase maintenance costs.

The Defence Secretary is believed to have wanted to press ahead with renewing Trident, but Mr Cameron agreed to postpone a decision in a major concession to Nick Clegg.