Ministers are locked in talks over whether to increase the UK’s defence spending at the upcoming Budget as Liz Truss and Boris Johnson both weigh up intervening in the debate.

Defence Secretary Ben Wallace has openly clashed with colleagues over his claims that Britain’s military has been “hollowed out” and Rishi Sunak is understood to want him to tone down his rhetoric.

He is pushing for a funding increase of £11bn in the Budget on 15 March, warning that the impact of inflation has reduced the capabilities of the Armed Forces.

Jeremy Hunt, the Chancellor, is open to topping up the military budget but wants to wait until the Government’s updated “integrated review” of foreign, defence and security policy – expected next month – is complete.

Both the last two prime ministers are considering going public with their own demands for higher spending on the Armed Forces. Mr Johnson promised that the UK’s target for its defence budget would rise to 3 per cent of GDP by 2030 when he was in power, up from its current level of 2 per cent.

In an article for the Wall Street Journal this week, he wrote: “We must accelerate Western support for the Ukrainians and give them what they need to finish the job.” He has called for the UK to send fighter jets to Ukraine.

Mr Wallace has clashed publicly with Johnny Mercer, the minister for veterans, over defence spending. Mr Mercer claimed that it was “obviously not credible” to argue funding had shrunk, while the Defence Secretary hit back: “Johnny is a junior minister, and Johnny luckily doesn’t have to run the budget.”

Officials from the Ministry of Defence were seen entering Mr Hunt’s offices at 11 Downing Street on Wednesday for further talks.

A senior Conservative MP told i that the defence budget was “still up for debate”, with wrangling between Mr Wallace and the Chancellor focusing on whether any extra money would merely cover real-terms cuts caused by inflation or if it would increase overall budgets in light of new security threats to the UK.

There has been particular concern in defence circles that due to the high capital costs involved in the Armed Forces, particularly in regards to the upkeep of military hardware, existing defence budgets were facing severe real terms cuts.

“There has been a huge worry that the army would suffer again. But after so much noise – not least the head of the army – it’s all being looked at by the Treasury again,” the MP said.

But the source added there is concern that any additional funding from the Treasury would only maintain MoD budgets, rather than increase them to deal with increased hostility from Russia and China. “That’s the worry. That it will be a flat line, not a growth in spending,” the Tory added.

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