Geoff Hoon said last night that the defence budget has been targeted by the Treasury for cuts in July's Comprehensive Spending Review.

Speaking on BBC Radio, the defence secretary said that funding for the armed forces will be competing for money for public services such as health, education and transport. Hoon added: "Ultimately the chancellor will have to strike the appropriate balance."

Hoon also said the Territorial Army may be given new duties as a "homeland defence" force.