Ministers may save cash by replacing Trident with air-launched missiles

John Reid, the Defence Secretary, ran into fierce opposition from Labour MPs last night who protested that replacement plans were a waste of money, and the £20bn cost would be better spent on schools and hospitals.

Clare Short, the former cabinet minister, writing in The Independent today says there was "enormous unhappiness in the Parliamentary Labour Party" and asks whether the Trident issue could become the "breaking point" for loyalty to Tony Blair.

The Treasury has also warned Mr Blair that it is worried about the potential high cost of replacing Trident, and its impact on the public finances,

The Prime Minister is committed to the replacement for Britain's ageing nuclear deterrent before the next election but is facing one of his most damaging battles with his own backbench MPs over the issue. Ministry of Defence sources indicated that one option it was studying included cruise missiles with nuclear warheads that could be launched from long-range bombers.

Tomahawk cruise missiles, which cost £1m each, could be upgraded for long-range use, fitted with British-built nuclear warheads and fired from aircraft launched at a time of crisis.

Using aircraft to launch the weapons would enable the Ministry of Defence to abandon the fleet of four Trident submarines that patrol the seas and cost an estimated £700m a year to maintain. Rear-Admiral Alan Massey, assistant chief of the Navy staff, confirmed military planners were preparing for an order to put nuclear weapons on aircraft.

Mr Reid insisted decisions were yet to be taken, but MPs warned that even seeking the cheaper option of cruise missiles would not defuse their opposition.

One former minister, Michael Meacher, said: "Frankly, this is a neocon idea for using tactical nuclear weapons rather than the massive Trident system. It would simply not address our concerns."

Labour MPs said buying Tomahawk cruise missiles with a British warhead would make the world more dangerous because it could lower the nuclear threshold with tactical nuclear weapons rather than a "doomsday" deterrent such as Trident.

Mr Meacher and a string of other Labour MPs argued there should be no replacement for Trident. Mr Meacher said replacing the nuclear system would do nothing to meet the threat of world terrorism and it would make it more difficult to stop nuclear proliferation. "I don't think you can say we need nuclear weapons if we are saying to Iran you cannot have them," he said.

Ministers have disclosed to The Independent that, in spite of official denials, decisions in principle to replace Trident have already been taken and the staff needed to create a new warhead have been hired at Aldermaston base. The argument now is over the type of system that the MoD chooses to replace Trident.

The Cabinet will be expected to have a full debate and put proposals to Parliament. The upgrade of Polaris, the predecessor to Trident, was agreed in secret by the Labour cabinet.

Trident cost an estimated £12.5bn to buy and fit with British-made nuclear warheads. A spokesman for the Ministry of Defence said: "We estimate the running cost of the Trident submarine force will average some £280m a year over its lifetime.''