For the past nine months some of the brightest brains in Whitehall have been advising and asking their political masters – first Labour, now Tory and Lib Dem – about a vital issue the country faces. Their secret deliberations promise to come to a head tomorrow at a crucial meeting of the government's new National Security Council.

The agenda will be the much-heralded Strategic Defence and Security Review, an exercise that has pitched against each other three of Whitehall's most formidable tribal chiefs – the heads of the army, navy, and air force – while that most powerful of lobbies, the arms industry, looks on anxiously.

The supreme test facing ministers will be whether they are prepared to make hard and coherent choices about Britain's security and role in the world or take the easy way out by opting for a gigantic fudge. The council, chaired by the prime minister, has been presented with three stances.

One was called "committed", that is intervening militarily whenever there was an opportunity to do so. Rejected as unaffordable, it would have meant continuing what Professor Anthony King called last week in his Chatham House address, Military Command in the Next Decade, the "vanity, vainglory, and miserliness" of Labour governments.

The opposite end of the spectrum was "vigilant", essentially pulling up the drawbridge and concentrating on defending the homeland. In the middle was the stance called "adaptable", having the ability to intervene but in a more modest way.

Unsurprisingly, the coalition government chose that. This was pretty easy for the council. Now comes the hard bit: none of the three armed forces will be safe from cuts, in both personnel and equipment. The RAF has accepted it will have to give up many of its fast jets – like its two-crew Tornados and ageing Harriers – and bases. The army is happy to get rid of many of its big tanks as well as its bases in Germany (when enough space is found for soldiers to live in the UK).

The real battle is between the navy and the army. Navy chiefs want a new Trident nuclear missile system and two new aircraft carriers equipped with expensive US F-35 Joint Strike Fighters – projects estimated initially to cost £35bn, excluding running costs. That figure is close to the total current annual defence budget of £37bn.

The navy says it also needs a new fleet of frigates and destroyers to combat pirates off the Horn of Africa and drug runners in the Caribbean, as well as protecting the victims of natural disasters and the sea lanes so vital for trade. Public opinion will not tolerate any future British involvement in the counter-insurgency missions the army (and Royal Marines) have had to cope with in Afghanistan once they end combat operations there in 2015, navy chiefs suggest.

The army counters by arguing that it is fanciful to say a British government will refuse to intervene in future when confronted with demands – not least from the US government or public opinion in Britain – to prevent or end a humanitarian disaster or conflict dangerous to British interests.

And, ask army officers, what is the point of having a weapon such as Trident, which may have been of deterrent value at the height of the cold war but against today's enemies is supremely irrelevant? Even Tony Blair, in his autobiography, said of Trident that "the expense is huge" and its utility was "nonexistent in terms of military use", though he eventually decided to go for it to maintain the UK's "status" and assurance "in an uncertain world".

General Sir David Richards, the former head of the army who will take over as chief of the defence staff once the outcome of the review is announced next month, has said we are at a "horse and tank" moment, referring to prolonged debates after the first world war. He has also warned of war by proxy – Russia and China engaging in cyberwarfare, for instance, rather than firing missiles at the west; of states using guerrilla, even terror, groups rather than their own people. The need for more unmanned drones and better intelligence gathering, as opposed to bombs, is obvious.

After so many years of irresponsible muddling through, to the serious detriment of all three armed services, it is time for courage and imagination, to take decisions rather than wait, Micawber-like, for better days.