Fox meets with PM for talks over defence budget cuts

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Indy Politics

Liam Fox will offer the Treasury a last-minute compromise today over the commissioning of two new aircraft carriers in a crunch meeting with George Osborne and David Cameron to thrash out a deal over the future of Britain's military spending.

The meeting of the National Security Council, headed by the Prime Minister, has become the focus of attention since a leaked letter sent to Mr Cameron from the Defence Secretary warned that "draconian" cuts to his department's £37bn budget would have significant consequences.

But in an attempt to preserve the construction of the two aircraft carriers currently planned, it is understood that Dr Fox is willing to offer a deal which would see one of them largely remain in port with limited personnel and aircraft, possibly saving billions.

Dr Fox briefly left the Tory Party conference to hold further talks with armed forces chiefs on Tuesday in readiness for his confrontation with Mr Osborne. They have been struggling to find a "coherent" plan which meets the Chancellor's demand for a 10 per cent budget cut between 2011 and 2014.

Compromising on the operational readiness of one of the carriers, which may include the sacrifice of dozens of £100m-a-piece Joint Strike Fighters, is said to be their preferred option. However, Dr Fox is also expected to push for a reduction in the 10 per cent cut.