One of the Conservative party's most influential voices on defence has conceded that Britain can no longer be regarded as a "division-one military power", and raised questions over the sense of replacing the Trident nuclear fleet with a new generation of missile-launching submarines.

James Arbuthnot, the veteran chairman of the defence select committee and a former defence minister, told the Guardian that funding cuts over the last three years had made it impossible for the UK to retain its status in the top tier of global armed forces.

But the focus of his most startling remarks was the plan to replace Trident with four new Successor submarines, which a recent study by the Royal United Services Institute (Rusi) thinktank estimated would cost £70bn-£80bn to build, arm and support over their working life.

David Cameron is a staunch supporter of a like-for-like upgrade and is expected to deliver an update on the Successor programme soon.

Arbuthnot said his views on the subject were changing and he was no longer certain that replacing Trident was the right move. The end of the cold war and a reshaping of the threats faced by the UK had undermined the logic of nuclear deterrence strategy, he said.

"Yes, there has been a steady decline in my certainty that we are doing the right thing by replacing Trident. Nuclear deterrence does not provide the certainty that it seemed to in the past. It's not an insurance policy, it is a potential booby trap," he said.

Though an admirer of the professionalism of Britain's armed forces, Arbuthnot said the cuts in defence spending and the loss of thousands of soldiers, sailors and aircrews since the 2010 strategic defence and security review had diminished the British military. More than 30,000 jobs have been axed, and the army is being reduced by a fifth.

The MP said he was concerned that the link "between the people in the country … and their armed forces is, at best, tenuous".

"I don't think that we are a division-one military power any more," he said. "I think we have very important attributes. We have some of the best armed forces in the world and some of the best equipment. But when you have a regular army of 82,000, it would be quite impossible to suggest that we are still a division-one military power."

Successive defence secretaries have insisted the UK still has the world's fourth largest defence budget, but Arbuthnot suggested this statistic was misleading.

"The size of the defence budget does not reflect the size of the armed forces. It reflects the quality and capability the armed forces possess, in terms of training and equipment, which are outstanding. But the footprint of our military forces across the country is tiny," he said.

"The understanding of the armed forces is fragile. The defence budget is unlikely to be supported if there is a huge divergence between the armed forces and the people they serve."

The coalition government gave approval for the first phase of replacing Trident, known as Initial Gate, two years ago but the major commitment to building the new submarines, called Main Gate, will not be taken until 2016.

Arbuthnot voted in favour of replacing Trident in 2007, and said he would do so again now. But he admitted his views were changing. There was now a strong argument, he said, for abandoning the continuous at-sea nuclear strategy, which the UK has had for decades.

"Nuclear deterrence is essentially aimed at states, because it doesn't work against terrorists. And you can only aim a nuclear weapon at a rational regime, and at rational states that are not already deterred by the US nuclear deterrent. So there is actually only a small set of targets.

"With the defence budget shrinking, you have to wonder whether [replacing Trident] is an appropriate use of very scarce defence sources. You have to wonder whether nuclear deterrence is still as effective a concept as it used to be in the cold war."

Arbuthnot said that if Russia wanted to attack the UK, it would not use nuclear missiles. "It would organise for a terrorist group to put a nuclear weapon on a container ship and sail it into Tilbury docks, with the signature of Pakistan on the nuclear device.

"And what would the UK do? Launch a missile at Islamabad? We could not be sure against what we are retaliating. Nuclear deterrence does not provide the certainty that it seemed to in the past. It's not an insurance policy, it is a potential booby trap."

Arbuthnot, who served in John Major's government, said doubts were growing about "the salience of a nuclear strategy at a time when the defence budget is shrinking".

"The reason I would still vote for it is that I still want to walk softly with that big stick. By unilaterally disarming, we would be sending a message to countries like North Korea and Iran that we are losing our military will to fight. Our armed forces have not lost their will to fight."

Arbuthnot said he would like to see the defence budget increase, but he thought this was highly unlikely because the country's finances were still in a parlous state.

"As a country, we have not got on top of our debt. We haven't reduced it by a single penny. We are simply reducing the rate at which our debt is going up. So every extra pound that has to go into the defence budget has to be borrowed."

After more than a decade of conflict in Afghanistan, Arbuthnot said the military was "doing [its] best to leave behind something that is sustainable … to give the Afghan people the best chance to make a country that is not a haven for terrorists".

But he admitted British forces, and the ministers who tasked them, had learned harsh lessons during 12 years of fighting the Taliban, and one of those lessons had been the limits of military intervention.

"The military can build a school but it cannot change an attitude of mind. If there is one thing that we have learned from Iraq and Afghanistan, it is the limit of the effects of military force.

"I think that understanding fed into the parliamentary vote on Syria. Our country has learned lessons and it has perhaps taken a parliamentary vote to ensure that the government has learned that lesson as well."

In the Rusi study, Professor Malcolm Chalmers, the thinktank's director of research and defence policy, said: "The UK would not become a nuclear-armed state now if it were not one already. With the end of the cold war, the UK is situated in one of the more secure parts of the world, is surrounded with friendly states, and enjoys a close [military] alliance."

With nuclear confrontation with Russia and China a very remote possibility, he said, Britain's nuclear deterrent had become "irrelevant to immediate security concerns".