The Government has refused to confirm or deny reports that Chancellor George Osborne is trying to strip control of the £40 billion project to build four new submarines from the Ministry of Defence.
The Chancellor is reported to have delivered an "ultimatum" to Prime Minister David Cameron that he will support the funding of the boats to carry Britain's Trident nuclear missiles only if the project is given to a new body reporting to the Treasury.
The Times quoted a "defence industry source" as saying there was a "tug of war" going on between the Treasury and the MoD, which would face a reduction in its power if the new submarine delivery authority was handed to a different department.
The unnamed source suggested that Mr Osborne was concerned that the MoD would not be able to guarantee the new subs would be ready by 2028, when the Royal Navy's Vanguard-class craft start to go out of service.
The source said: "The Treasury has the money for the submarines but what they cannot have is a lack of confidence in delivery. The MoD has a poor record on delivering submarines on time."
Asked to comment on the report, a Government spokesman responded: "While we are not prepared to comment on the contents of a leaked document, the Government remains committed to maintaining a continuous at-sea deterrent, and to replacing the current Vanguard class of nuclear armed submarines with four Successor submarines."
Further details of the submarine programme are expected in the Government's Strategic Defence and Security Review, to be unveiled by Mr Cameron on November 23.
PA
