£5bn aircraft carriers 'will fall victim to spending cuts'

The Government is looking to scrap £5 billion plans for two new Royal Navy aircraft carriers amid drastic efforts to tackle the deficit, it was claimed today.

Sir Ian King, chief executive of BAE Systems, disclosed that the firm had been asked to provide detailed figures for cancelling one or both of the 65,000-ton warships.

Sir Ian reportedly told the Commons Defence Select Committee: "We have been asked recently to look at a number of options.

"The programme is for two vessels but the options range from one vessel to no vessels, but having an equivalent programme to maintain skills."

He also warned yesterday that scrapping the projects would cause permanent damage.

"We are at a critical point with some programmes where if you cut back those programmes you would not be able to reconstitute that capability in the UK," he added.

More than £1 billion is believed to have been invested in HMS Queen Elizabeth and HMS Prince of Wales, which are due to launch in 2016 and 2018.

But the Ministry of Defence is under huge pressure to cut its £36.9 billion annual budget by up to 20 per cent.

The department also faces footing the bill for replacing the Trident nuclear deterrent - a cost which was previously met directly by the Treasury.

An MoD spokesman stressed that no final decisions have been made on the carriers.

"The Defence Secretary has made clear that tough decisions will need to be made but the complex process of a Strategic Defence and Security Review will be concluded in the autumn and speculation at this stage about its outcome is entirely unfounded," he added.