Prime Minister David Cameron and President Barack Obama, Jan. 16, 2015 (photo: Arron Hoare/Office of the Prime Minister)

Barack Obama has told David Cameron that Britain must stick to its Nato spending target, or set a damaging example to its European allies.

In a blunt warning not to cut the UK defence budget, the US President personally insisted to the Prime Minister that a failure to hit the 2 per cent of GDP spending target would undermine the military alliance.

The American President made the direct appeal during private meetings when the Prime Minister visited Washington last month….

Military leaders fear the Treasury will try to claw back a fresh £1 billion a year from the Ministry of Defence budget to try to fill Britain’s stubborn budget deficit.

Diplomatic sources said the British ambassador to Washington was now facing an intense lobbying campaign to get the Government to commit to the 2 per cent spending level.

One source said Mr Obama had warned the Prime Minister last month that “if Britain doesn’t spend 2 per cent on defence, then no one in Europe will….”

One American official confirmed Washington had been applying pressure at a “high-level“.He said: “We’ve been saying, ‘We are worried that you are not going to hit two per cent, after all you said in Wales.'”

There are growing calls among backbench MPs from both sides of the Commons for the Government to protect defence spending.

Earlier this week two former defence ministers said it would be “a fundamental and unforgivable error” to underestimate the security risks and global instability Britain now faces….