Government U-turn on plans to build new warships... sinking hopes for hundreds of jobs

Its long-awaited fleet of new Type 45 Destroyers was slashed from eight to six - meaning just three could be available at any one time due to maintenance and refitting.

It comes amid a grave budget crisis across the three services, with the Navy becoming the first loser.

The Government originally promised 12 of the sophisticated vessels, which cost almost £1billion each.

Cuts: The HMS Dauntless - an unarmed Type 45 destroyers at launch in Govan shipyard, Glasgow - will become one of just six ships built after plans for an extra two were axed

Three of the six Type 45 Destroyers have been launched so far - HMS Daring, HMS Dauntless and HMS Diamond.

The other three warships - Defender, Dragon and Duncan - are at various stages of the building process.

Critics fear that buying so few of the ships - designed to protect other vessels from hostile airstrikes and wave-skimming guided missiles - will leave the fast-shrinking Royal Navy gravely vulnerable in an unexpected future war.

The Army and the Royal Air Force are now waiting for the axe to fall on their own kit programmes, with cuts expected in ambitious schemes for new armoured battlefield vehicles and to the number of Eurofighters Typhoon jets purchased for the RAF.

Defence minister Bob Ainsworth told the Commons that plans for the seventh and eighth Type 45 warships were being dropped.

He said: 'The reality is we do not have unlimited resources.

'We have to prioritise between a range of competing requirements, focusing on the balance between current operations and future capability.'

He claimed the six remaining ships would provide a 'formidable capability' and were 'more capable than we first envisaged.'

At work: An artist's impression of the Type 45 destroyer which has fallen victim to defence cuts

But Conservative MP Mark Pritchard told the Commons: 'One of those capabilities is not being in two places at the same time.'

Shadow defence spokesman Gerald Howarth described the announcement as 'pretty desperate news', and Labour was in 'complete disarray' over military equipment.

And Bernard Jenkin told fellow MPs the original plan envisaged for 12 ships because some would always be in refit or maintenance, or in transit to and from operations.

'Only six Type 45s perhaps means a maximum of three deployable ships at any one time,' he warned. 'This is a very, very limited capability.'

The defence equipment budget is in crisis due to the on-going pressures of operations in Iraq and Afghanistan, and the strain of funding astronomically expensive projects such as the £20billion giant aircraft carriers and new jets to fly from them, and the RAF's £18billion Eurofighter fleet.

Bob Ainsworth admitted in the Commons that 'the whole equipment programme' was now having to be re-examined, in order to 'adapt in the face of rising costs' and cope with the needs of current operations.

Critics fear years of relentless military cut-backs, which have seen a fifth of Britain's military manpower axed since Labour came to power and scores of tanks, aircraft and ships scrapped to save money, will leave the nation ill-equipped to cope with future 'strategic shocks' - unexpected threats or wars such as the Falklands Conflict or September 11.

Prominent Labour MP Bruce George, former chairman of the Defence Select Committee, gave a stark warning that defence spending was at dangerously low levels.

He said: 'It has now reached the point where, in terms of personnel and in terms of equipment, it is inadequate to take the stance that is being taken.

'Lives are lost if equipment is inadequate and wars can be lost if equipment is inadequate.'

The Type 45 Destroyer is 500ft long, but its 'stealth' characteristics mean that on an enemy radar screen it looks no bigger than a fishing boat.

Its state-of-the-art radar and missile system can track a thousand targets at once and shoot down an enemy guided missile the diameter of a cricket ball travelling at five times the speed of sound.

The First Sea Lord Admiral Sir Jonathon Band has warned that the senior service is in danger of 'turning into the Belgian Navy' and needs an extra £1billion a year to keep operating.

A BRIEF HISTORY OF NAVAL DECLINE

• England's first navy was formed in the 9th century, with 400 ships
• The modern Royal Navy was established in 1707
• At the Battle of Jutland in 1916, the Navy deployed 150 ships, including 28 battleships and 78 destroyers
• In 1939 it deployed nine battleships, 95 destroyers and 25 subs to fight the Battle of the Atlantic
• By 1960, it consisted of 202 vessel
• In 1982, around 100 ships were deployed in the Falklands War
• Today, the Navy has 89 vessels.