Armed Forces no longer have the cash to defend Britain from every threat, says Liam Fox

The Armed Forces will not have the resources to defend the UK from all potential future threats under new budget cuts, the Defence Secretary warned.

In a frank interview, Dr Liam Fox said the state of the public finances meant Britain could no longer be protected from every conceivable threat.

The Army has been asked to cut its budget by a reported 25 per cent and in his clearest indication yet of where the axe is likely to fall, Dr Fox suggested that troops could be pulled out of Germany for the first time since 1945.

Under threat: Defence Minister Liam Fox has questioned the RAF's need for a number of different transport aircraft and warns that their plans to buy transporter planes could be put on hold

And he said that plans to buy hi-tech naval warships and RAF transporter planes could be put on indefinite hold.

His comments suggested the cuts could reduce Britain's military capabilities to their lowest level since World War II.

'We don't have the money as a country to protect ourselves against every potential future threat,' Dr Fox told the Daily Telegraph.

'We just don't have it. I did not come into politics to see reductions in the Armed Forces but I also did not come into politics to see the destruction of the economy.'

Since 1940, Britain has maintained a sufficient military force to conduct all-out warfare, counter-insurgencies such as in Afghanistan, and medium-scale campaigns like the Falklands or Sierra Leone

In future Britain's military forces would be configured only for 'realistic potential future threats', he added.

Since 1940, the nation has maintained a sufficient military force to conduct all-out warfare, counter-insurgencies such as in Afghanistan, and medium-scale campaigns like the Falklands or Sierra Leone.

And it is committed to contributing forces to military campaigns under military pacts such as Nato.

But Dr Fox has signalled that it could have to abandon one of those capabilities if it is forced to slash its budgets.

There are currently 25,000 troops stationed in Germany, a force Dr Fox has previously said that he hoped to withdraw at some point.

'We have to look at where we think the real risks will come from, where the real threats will come from and we need to deal with that accordingly,' the minister said.

'The Russians are not going to come over the European plain any day soon.

'I would say, what do Challenger tanks in Germany and the costs of maintaining them and the personnel required to train for them, what does that contribute to what's happening in Afghanistan?'

Earlier this week, in a speech at Farnborough air show in Hampshire, Dr Fox admitted the MoD's equipment programme was 'entirely unaffordable' and indicated that the nation's fleet of warships, fighters and armoured vehicles should be reduced.

He criticised the fleet's obsession with hi-tech ships such as the Type 45 destroyer and questioned the number of different transport aircraft required by the RAF.

On Tuesday a National Audit Office report found that the MoD was already £500million over budget for the current financial year with 'insufficient funds to meet planned expenditure'.

Early indications show that as many as 30,000 servicemen could lose their jobs if the ministry is to meet departmental budget cuts.

But Dr Fox insisted any cuts would not mean redundancies for troops before the end of the fighting in Afghanistan.