"That applies to buildings, it also applies to the way we work and the efficiencies we need."

Asked about the numbers in the newspaper's report, Mr Fallon said: “The defence budget is the fifth biggest in the world.

“It’s £35 billion, £35 billion a year. Next week, the beginning of the financial year, it goes up to £36 billion, it’ll be £40 billion by the end of this parliament, it’s going up every year.

“But like any large organisation we, of course, continue to look for efficiencies and all the savings from efficiencies are put back into investment to the new ships, the new planes, the new armoured vehicles that we need."

An MoD spokeman said: “It is unclear how the figures presented by The Times have been calculated and, therefore, we cannot verify their accuracy.”