The chancellor has made a surprise commitment on defence spending in his summer budget.
 
In what will come as welcome news to the Ministry of Defence, George Osborne has promised to keep meeting the NATO target of spending two per cent of GDP on the military until at least 2020, and to increase defence spending alongside that by 0.5% a year in real terms.
 
The announcement ended months of speculation over the pledge. Mr Osborne said: 
"While those commitments don't come cheap, the alternatives are far more costly."
Until now, ministers had not committed the UK to spending at that level beyond the current financial year - prompting pressure from backbench MPs and military chiefs. Mr Osborne added:
 
"The Prime Minister and I are not prepared to see the threats we face to both our country and our values go unchallenged.
"Britain has always been resolute in defence of liberty and the promotion of stability around the world. And with this government it will always remain so."
"So today I commit additional resources to the defence and security of the realm."
 
In its budget policy document, the Government says it remains committed to maintaining the size of the Army at 82,000.
 
In addition, a joint security fund of £1.5 billion a year will be created by the end of the Parliament to pay for increased spending on the military and intelligence agencies.
 
The Chancellor also disclosed that the budget for the overall counter-terrorism effort - a total of more than £2 billion spent by a range of departments, agencies and the police, will be protected.
 
The budget also included funding for the Defence Medical Welfare Service and the Royal Commonwealth Ex-Services League. Mr Osborne added:
"We're supporting the incredibly courageous members of our special forces who are injured and, in the 75th Anniversary of the Victoria Cross and George Cross Association, quadrupling the annual annuity we pay to those who demonstrated the highest valour and who I had the honour of meeting yesterday."
Former Navy chief Admiral Lord West said he was "absolutely delighted" that the Nato target will be met.
 
He told the Press Association: "That's got to be seen very much as a minimum. My only concern is what exactly is now included in that methodology compared to two years ago? I would like a very clear explanation."
 
Lord West said it is crucial that the UK's military capability is enhanced, saying: "It is a much more dangerous and unstable world."