Theresa May has been dragged in to an extraordinary row between Defence Secretary Gavin Williamson and Treasury Minister Liz Truss over funding for the Armed Forces.

The Mail on Sunday has been told that the bust-up left Ms Truss feeling so ‘threatened’ by Mr Williamson that the Prime Minister personally assured Ms Truss that she had the support of Downing Street.

It is the latest episode in a long-running campaign by Mr Williamson to secure a funding boost for his department.

Earlier this year, Mr Williamson caused fury in No 10 by fomenting a revolt on the Tory backbenches over MoD funding and warning that he could ‘break’ Mrs May if she did not find the money.

Bust-up: Liz Truss, Chief Secretary to the Treasury, said: 'We have to recognise that it's not macho to just demand more money'

Mr Williamson argues that to maintain effective operations, defence spending should be boosted by £20 billion over ten years.

Ms Truss, the Chief Secretary to the Treasury, first antagonised Mr Williamson by slapping him down for his public lobbying, saying: ‘We have to recognise that it’s not macho just to demand more money.

'It’s much tougher to demand better value and challenge the blob of vested interests within your department.'

Tensions boiled over during recent discussions between the MoD and the Treasury over Armed Forces funding, including changes to wages and pensions.

A well-placed source said: ‘Gavin became very animated and demanding and it made Liz feel threatened. It soon got back to Downing Street, and Liz sought assurances that she had No 10’s support — which she received personally from Theresa’.

It is understood Mr Williamson also clashed recently with a second senior Treasury figure, who warned him: ‘Don’t ever speak to me like that again’.

Mr Williamson has been a thorn in the side of Philip Hammond’s department since becoming Defence Secretary last year, prompting one ally of the Chancellor to describe him mockingly to this newspaper as ‘Private Pike’.

Theresa May has been dragged in to the extraordinary row

The spending row flared into life after Mrs May announced a £20 billion-a-year boost to the NHS budget earlier this year, leading Mr Hammond to declare there was no money left for similar rises in defence, housing or schools spending.

When Mr Williamson insisted to Mrs May he needed a minimum of £2 billion a year extra for the next decade, she questioned whether the UK had to be a ‘tier one’ military power.

Mr Williamson responded that after Brexit he thought it would be even more important for the UK to ‘sit at the top table’ internationally.

Asked about the Liz Truss row, a senior Government source said: ‘The Prime Minister was aware of the disagreement and did speak to the Chief Secretary’.

An official spokesman for Mr Williamson said last night: ‘We do not recognise that course of events’.

A spokesman for Ms Truss declined to comment.