Geoff Hoon's attempt to gain prime ministerial backing for more funds for the MoD in next week's Budget appears to have backfired.

"Tony is not happy about this", a government source tells the Telegraph.

"He has instructed his ministers and the party to make investment versus cuts the dividing line with the Tories at the next election, and here comes Hoon accusing the government of cutting the MoD budget. It's ludicrous."