The Pentagon will announce a major new £200m intelligence centre in Britain this week, which would act as the headquarters for all US military data in Europe and Africa, according to US media reports.

Known as the Joint Intelligence Analysis Centre, the facility will be located at the RAF Croughton, a US Air Force base near Milton Keynes, which already processes about a third of US military communications in Europe.

The proposed ultra-secure data centre would be the US headquarters for European and African military communications, employing up to 1,250 staff analysing intelligence from more than 50 countries. It is due to be completed next year.

Many of these functions are currently carried out at RAF Molesworth, the Cambridgeshire air base under the control of the US Air Force, which is being closed down as part of a cost-cutting drive by the American military.

The decision to create a giant intelligence centre in the UK by merging the facilities of Croughton and Molesworth will be controversial in the US, where there has been a prolonged campaign to set up a headquarters in the Portugese- controlled Azores islands in the north Atlantic. That campaign is being led by Devin Nunes, the Republican chairman of the House of Representatives Select Committee on Intelligence, which oversees all aspects of the US intelligence community.

Mr Nevin, a third-generation Californian whose family emigrated from the Azores to America, argues that it would be much cheaper to base the centre in the Portugese islands. He wants the facility to be based in the air force base at Lajes Field on the island of Terceira.

“What we are trying to do now is put some sunlight on this, so it can be exposed in the public, so people can debate and look at this again. We want thorough questions to be asked,” Mr Nunes told The Wall Street Journal.

The US Department of Defence declined to comment yesterday.

However, when the Molesworth closure was announced last year, a spokesman for the US European Command said: “The planned replacement facility will consolidate intelligence operations into an efficient, purpose-built building, which will save the US Government $74m (£51m) per year and reduce significant operational risk associated with current, substandard, deteriorating facilities.”

By contrast, moving the base to Lajes would cost $1.14bn upfront and cost an extra $43m a year to run, according to Pentagon estimates.

Mr Nunes dismisses those assessments, claiming they ignore issues such as the much higher cost of living in Britain and large supply of houses in Lajes – which he said could eventually save the US taxpayer $1.5bn.

RAF Croughton has a direct cable link to Government Communications Headquarters (GCHQ) in Cheltenham and serves as a relay station for CIA agent communications. Once the centre is completed, it will be at the front line of intelligence activities and will include personnel from unnamed British agencies, according to US Air Force briefing documents.

The Ministry of Defence and the Foreign and Commonwealth Office in the UK also declined to comment on the new centre yesterday.