A £38bn black hole in the UK's defence budget has been eliminated, Philip Hammond, the Defence Secretary, said.
Hammond told the House of Commons that the Government had been able to balance the military books, but had to admit that "tough decisions" were required to fill the gap.
However, he refused to release specific details of costings, citing national security and commercial sensitivities.
Despite now having £8bn headroom in the overall 10-year defence programme and a £4bn centrally-held contingency fund, Hammond said planned redundancies in the forces would still go ahead.
The budget 'black hole' has not been helped by changes to the Ministry of Defence's (MoD) procurement.