Aircraft carriers delayed by Ministry of Defence budget crisis (Too much bailing out Banks and Not enough Battle Tanks)

A review of major defence projects will next week confirm that the MoD does not have enough money to meet its planned timetable for buying new ships, warplanes and armoured vehicles.

Instead of cutting any projects outright, John Hutton, the Defence Secretary, has decided to delay several of them instead.

The biggest to be affected will be the £3.9 billion purchase of two new aircraft carriers.

The vessels had been due to enter service in 2014 and 2016. But one of the new ships will now be delayed by at least a year and possibly two.

The delay will raise fears for jobs in the defence industry. The MoD estimates that the project will sustain around 10,000 jobs both directly and indirectly.

MoD officials said that while some jobs may be lost as a consequence, prolonging the construction period for the carriers had the potential to support jobs over a longer period.

The new timetable will also force the Navy to put off the retirement of HMS Illustrious and HMS Ark Royal, the existing carriers.

That will mean that the heart of Britain's naval power in the next decade will be two ships which are both more than 30 years old and well past their best.

Illustrious, the flagship of the fleet, has been in service since 1982 and, according to the MoD's current timetable, is due to retire or "pay-off" in 2012. The Ark Royal entered service in 1985 and is due to retire in 2015. Both ships already require ever-longer spells in dock to allow them to go on operating.

Mr Hutton is likely to present the review to MPs on Tuesday and argue that delaying the carriers will mean they enter service at the same time as the new generation of fighter aircraft they are intended to carry.