Royal Navy ships face axe - claim

The cutbacks are being considered after the Treasury imposed tight spending restrictions on the Ministry of Defence (MoD) for the next three years.

Five warships could be decommissioned from next April, reducing the Navy's capability to a level where it would only be able to carry out "one small scale operation", according to documents obtained by the Sunday Telegraph.

A whistleblower in the MoD sent the newspaper details of arguments between senior officials and Treasury Chief Secretary Andy Burnham over the Comprehensive Spending Review settlement.

Under the deal, announced in July, the MoD will receive an annual increase of 1.5% above the level of inflation for the years 2008-11.

However, there was also a commitment to purchase two new 65,000-tonne aircraft carriers, at a total cost of around £4 billion - meaning savings had to be found elsewhere to maintain funding for operations.

An email from the MoD whistleblower also provided an "R Silt Chart Against Force Levels" from February, which was used as an internal briefing paper.

It says that with no further commissioning of ships, the total strength of the Navy and Royal Fleet Auxiliary would fall steadily from 103 to 50 within 20 years.

However, MoD sources dismissed the idea that the number of ships could be halved, insisting such documents were produced as a matter of routine.

And an MoD spokesman said: "No decisions have been taken to make changes to force structures. As ever, we continually review the defence programme. The CSR settlement sees the continuation of the longest period of sustained real-terms growth in planned defence spending since the 1980s."