MoD must foot £20bn Trident bill

The Ministry of Defence will have to find £20 billion to renew the Trident nuclear deterrent from within its budget, George Osborne has said.

The Chancellor made it clear the MoD could not expect special treatment over the replacement of the missile-carrying submarines - even though the nuclear deterrent has traditionally been funded separately from the defence budget.

His ruling is a bitter defeat for Defence Secretary Liam Fox, who has been locked in a semi-public battle with the Treasury over the cost of Trident renewal.

In a television interview earlier this month, Dr Fox warned against playing "fast and loose with the country's defences".

He said it would be "very difficult to maintain what we're currently doing in terms of capability" if the MoD was forced to meet the capital costs of building the new submarines from within its core budget.

Bu Mr Osborne said: "The Trident costs, I have made it absolutely clear, are part of the defence budget. All budgets have pressure. I don't think there's anything particularly unique about the Ministry of Defence. I have made it very clear that Trident renewal costs must be taken as part of the defence budget."