LONDON: An internal Ministry of Defence report which reveals that £2.5bn is being wasted on equipment each year has been suppressed, it was claimed yesterday. The report by Bernard Gray, a former MoD official, is said to contain devastating examples of taxpayers’ money being wasted on expensive procurement projects which are unaffordable.

He was asked in December by John Hutton, then Defence Secretary, to examine ways of getting better value for money from the biggest defence programmes. Tonight it emerged that the report, which had been due to be published, is now to be used as part of the Government’s plans for a strategic defence review, to be held after the general election next year.

Channel 4 News said it had been told the Gray report was so damning that the MoD had decided against publication.

Kevan Jones, Defence Minister, insisted he did not recognise the figure of £2.5 billion wasted. But this level of over-spending has been highlighted over the years by the independent National Audit Office. Channel 4 claimed the MoD always ran out of money towards the end of each financial year and had to delay programmes which led to an increase in costs.

One example is the Royal Navy’s aircraft carrier programme. The cost of buying two 65,000-tonne carriers was supposed to be £3.9 billion, but after the MoD delayed the construction programme by up to two years last year, the price has now risen to nearer £5 bn.

Calling for the Government to publish the Gray report in full, Liam Fox, the Shadow Defence Secretary, said: “This is a damning indictment of 12 years of incompetence. By trying to suppress this report, the Prime Minister has demonstrated that he cares more about the reputation of Labour than he does about the well-being of the Armed Forces.”

“The Government has a moral duty to ensure that our Armed Forces have the equipment they need for the warfighting they are asked to do. Instead we have a catalogue of bureaucracy, incompetence and time-wasting. Gordon Brown, as Chancellor, was never willing to fund Tony Blair’s wars, now that he is Prime Minister, he is trying to cover up his mistakes,” he said.

Dr Fox said:“We need regular defence reviews to ensure that such massive wastage cannot happen again and a Conservative government would legislate, if necessary, to ensure that they happen in every Parliament.”

“Bernard Gray’s full report needs to be published as soon as possible. We also need as full a disclosure of MoD finances as possible, as the next government is already facing a massive shortfall. Labour must not be allowed to operate a scorched earth policy on defence.” Eight Merlin helicopters being prepared for Afghanistan will be required to fly troops into combat zones even though it is yet to be decided whether to fit armour-plating for extra protection.

The helicopters being sent over four months after serving in Iraq are being modified to ensure they are safe for the altitudes in Helmand province.

Fitting the Merlin Mark 3 with a layer of armour to protect the crew and troop-passengers from ground fire is not part of the basic modifications.