Dec. 10 (Bloomberg) -- Britain may delay a 3 billion-pound ($4.5 billion) aircraft-carrier contract, scrap the purchase of armored vehicles and scale back a helicopter order as the government pares defense spending, the Conservative Party said.

The cuts will be detailed in a review of the budget for military equipment to be released tomorrow, opposition defense spokesman Liam Fox said in an e-mailed statement, citing “leaked reports” prior to the report’s publication.

The Ministry of Defence, which is fighting wars in Iraq and Afghanistan, is trying to trim spending at the request of the Treasury, which has been grappling with one of Europe’s biggest budget deficits. Any cuts would come just as Prime Minister Gordon Brown boosts investment in other parts of the economy to stimulate growth in response to the credit crisis and global recession.

“The prime minister believes that fiscal stimulus is the answer and yet he intends to cut three major programs, all of which are leading-edge technology,” Fox said. “This is the culmination of Labour’s decade of neglect of the armed forces.”

The government formalized an order for the two Royal Navy carriers with BAE Systems Plc, Europe’s biggest defense contractor, and VT Group Plc as recently as July 3, saying the work would create or sustain 10,000 jobs. The contract was held up as Britain sought to cut defense spending by 2.7 billion pounds.

BAE fell 8.25 pence, or 2.3 percent, to 345.75 pence in London, where the company is based. The stock is down 31 percent this year. Southampton, England-based VT rose 2.3 percent to 527 pence, paring declines for the year to 24 percent.

The MoD confirmed that the review’s conclusions are due to be published tomorrow, while declining to comment further.

‘Owning Up’

“The aircraft-carrier announcement is the government finally owning up to industry and the public that they so dragged out the process that there was never any realistic prospect of them meeting the 2014 and 2016 in-service dates,” Fox said in the statement. “This questions whether the government is really committed to the carrier program.”

The ships, HMS Queen Elizabeth and HMS Prince of Wales, will be the biggest in Royal Navy history, measuring 920 feet (280 meters) long and displacing 65,000 metric tons.

“The British just don’t have the cash, and strategically they have no business trying to do force projection in areas beyond the Mediterranean, beyond the range of land-based Royal Air Force attack aircraft,” said Daniel Solon, an aerospace analyst at Avmark International in London.

Truck Cuts

There are also likely to be “significant cuts” to the Future Rapid Effect System armored-truck program, which calls for the procurement of about 3,300 vehicles in 16 variants, according to Fox.

He said that the program may be scrapped after “months of wishful thinking” that General Dynamics Corp. of the U.S. would hand over intellectual property rights for the Piranha 5 vehicle chosen for the utility-vehicle element of the contract.

“The government has wasted time and money on a solution which required General Dynamics to concede something that they were never going to give,” the shadow minister said.

A contract for upgraded Lynx helicopters will be reduced by eight aircraft, Fox said. Britain placed a 1 billion-pound order for 70 of the helicopters with Finmeccanica SpA’s AugustaWestland unit in June, 2006.

The Lynx purchase is being scaled back “at a time when our armed forces are crying out for more helicopters,” he said.

Fox hasn’t directly seen the Equipment Capability Review and based his comments on conversations with defense chiefs in the Middle East last week, Conservative Party spokeswoman Amy Jackson said by telephone today.

To contact the reporter on this story: Sabine Pirone in London at spirone@bloomberg.net

Last Updated: December 10, 2008 12:28 EST