He called on Treasury ministers to stop undermining not just the RAF but all the armed forces, while 'basking in the reflected glory' of the Gulf war.
The defence budget is expected to be cut by a further pounds 1.3bn over the next three years with subsequent cuts of pounds 500m a year over the 10 years from 1996.
In a speech to the Air League in London, Sir Michael said: 'I noticed running up to the public expenditure round that there has been a campaign to discredit the Royal Air Force. We know who has instigated it and why.'
Although he did not name names, defence sources pointed the finger at the Chief Secretary to the Treasury, Michael Portillo. He is accused of leaking stories to the media, such as details about the Israeli air force requiring far fewer senior officers than the RAF.
However, all three services are already facing heavy cuts. The RAF is losing about half its air defence fighter force and about a third of its bomber strength.
The three chiefs of staff are described by sources as 'spitting nails' over the latest proposals to cut the defence budget even further.
Malcolm Rifkind, Secretary of State for Defence, is hopeful that the front line can be spared and the new savings found in internal 'efficiencies'.
In his speech last night, Sir Michael said of the Treasury's actions: 'The most common theme is to compare the RAF to the Israeli air force, concluding we have far too many people for each combat aircraft and by implication that we are fat, inefficient and poorly organised.
'It is a silly and dishonest comparison. Compared to the Israeli air force - a fine air force but a force in a nation which has been in effect at war since the 1950s - every air force looks to have more personnel per combat aircraft. But at the drop of a hat the IAF can mobilise perhaps 10,000 people.' Sir Michael said that in a crisis he could possibly mobilise about 89,000 personnel.
Sir Nicholas Fairbairn, Tory MP for Perth and Kinross and a senior member of the all-party Commons select committee on defence, said last night: 'The Treasury are behaving abominably towards the armed forces. For a serving officer to be driven to the point of defying the regime whereby they do not comment is an indication of the frightfulness of the situation. But thank goodness he did, though I don't think he will get a job at the MoD afterwards.'
Eric Martlew, the Opposition frontbench spokesman on the Royal Air Force, said: 'It is as though we are treating the armed forces as the enemy within. We have got to a very extraordinary and sorry state of affairs where a very senior officer like Sir Michael is actually prepared to criticise the Government publicly, even if it is coded.'