Go-ahead for new aircraft carriers

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Defence Secretary Des Browne told the Commons that orders were being placed for the two 65,000 tonne vessels - the largest warships to be built in the UK.

"The carriers represent a step change in our capability, enabling us to deliver increased strategic effect and influence around the world at a time and place of our choosing," he said.

The ships, to be named HMS Queen Elizabeth and HMS Prince of Wales, are due to enter service in 2014 and 2016 - two years later than originally - expected at an estimated cost of £3.9 billion.

The head of the navy, Admiral Sir Jonathon Band, said that the announcements confirmed Britain's status as a "major player" on the world stage. "This is a significant decision to invest in the future, to be able to deliver air power around the world," he said.

"I am entirely content that the country will get the navy it deserves, a powerful navy for the future, which is entirely right because we are a large player on the world scene."

The programme is expected to create or safeguard 10,000 jobs around the UK, with more than 1,000 people employed on the actual construction at shipyards at Govan, Barrow, Rosyth and Portsmouth.

The announcement formed part of a financial settlement for the Ministry of Defence which will see spending on the forces increase by £7.7 billion over the next three years. Officials said it represented an average annual real terms increase of 1.5% over the period and would take the MoD's budget to £36.9 billion in 2010-11.

Details of the financial package were announced ahead of the Government's full comprehensive spending review in the autumn. Mr Browne told the Commons that the UK would continue to co-operate with France on the design of the carriers. He confirmed that the announcement would clear the way for BAE Systems and the VT Group to merge their shipbuilding assets in a joint venture worth a reported £1 billion.

BAE chief executive Mike Turner said: "This is a significant milestone for the UK maritime industrial sector and will help retain critical areas of expertise in the UK."