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1004

October20-262010 No. 1004

THEWEEKLYWORLDEDITION OF The DailyTelegraph AND The SundayTelegraph telegraph.co.uk/expat

TheTelegraph

GREATESCAPEWorldwatchesasall33Chileanminersarerescued

:: WORLD NEWS PAGES 16 & 17

Broadway debutante is a hit, aged 64

Rooney to go? Striker refuses newdealwith ManchesterUtd :: SPORT P48

By James Kirkup and Andrew Porter DAVID CAMERON intervened last Friday night to halt a revolt by some of the most senior figures in the military over the scale of defence cuts.

The Prime Minister made his move after being told by the new head of the Army that proposed reductions in the Forces threatened Britain’s mission in Afghanistan.

Gen Sir PeterWall, the Chief of the General Staff, made clear to No10 that he could not accept cuts in Army numbers and training that would hamper the Afghan operation.

In the wake of Sir Peter’s warning, Downing Street sources said Mr Cameron had blocked a Treasury demand for a 10 per cent cut in the defence budget.

“He has intervened against the Treasury. The Army will be protected,” a source said.

Mr Cameron told the Treasury that he would not accept substantial reductions in Army numbers. Downing Street sources added that Mr Cameron was insistent that more savings be made from Trident.

Final details of the budget deal were hammered out last Friday in Whitehall, but military sources refused to declare victory in the power struggle.

Mr Cameron’s intervention followed a day of threats from senior defence figures.

The angry response from the top brass came after the Treasury attempted to force the Ministry of

Defence to make cuts deeper than those which had been agreed previously. Military chiefs had described the move as a “betrayal”.

It had appeared last Thursday that Dr Liam Fox, the Defence Secretary, and George Osborne, the Chancellor, had agreed a deal for a seven per cent cut to the MoD budget.

But the Treasury position hardened last Friday morning, with officials making renewed demands for 10 per cent cuts.

The last-minute switch caused fury at the MoD, and Forces chiefs were sent to Downing Street for crisis talks.

In private meetings, senior commanders told Mr Cameron’s team that the bigger cuts package would undermine the Afghan war and potentially force Britain into a humiliating early withdrawal.

According to sources in No10 and the MoD, Sir Peter made clear that he was not prepared to support the cuts being demanded.

However, they said he did not go as far as threatening to resign.

Army sources said that the full cut demanded by the Treasury would have meant a loss of 7,000 men and the removal of up to four front-line infantry battalions.

Army training operations would also have been affected, ultimately impacting on the Afghan operation, the Army warned. Mr Osborne has been pushing for Dr Fox to accept a budget cut of 10 per cent. But after weeks of wrangling, the Defence Secretary believed he had secured

Continued on page 2

IMAGE

IRE

WARGO/W

THEO

JOANNALUMLEYhas become the toast of Broadway after her debut performance. The64-yearold actress and champion of

Death of an aid worker LindaNorgrove ‘killed byUS grenade’ :: WORLD NEWS P15

Cyber war Doweneed geeksmore thansoldiers? :: COMMENT P18

the Gurkhas washailed by NewYorkcritics as delightful, regal andhilarious in LaBête, apastiche of a17th-century French comedy. The production received only lukewarm reviews in London.

Lumley said: “In whatwild dreamwouldoneever think onewould play Broadway?”

‘If we stay underground for

69 days we’ll miss the spending review’ Business leaders give Osborne boost on eve of Comprehensive Spending Review Report, page 3