Defence Secretary Liam Fox said he was launching a full review of how the armed forces were run and wanted structural reforms at the MoD.

Fox said the previous Labour government, ousted after May elections, had set out 37 billion pounds (58 billion dollars, 45 billion euros) worth of defence spending plans over a decade without any funding to pay for it.

Fox said the MoD had to be "leaner", less centralised and more transparent, with greater accountability.

"The prime purpose of what we are doing is to make sure that our armed forces on the frontline have everything they need, and all the support they require, to carry out their mission successfully and safely.

"That means that the backroom sometimes has to do without to make sure that the frontline gets what it wants."

Britain has around 10,000 troops fighting Taliban insurgents in Afghanistan.

The MoD is not exempt from the blanket budget cuts that the new Conservative-Liberal coalition are imposing in a bid to rein in Britain's overspending.

The ongoing strategic defence and security review, launched when the coalition took office, would concentrate on remodelling Britain's defences towards future threats, Fox said.

The "moral climate" of the post-Cold War world demands precision weapons and battles are increasingly waged in cyberspace and using unmanned vehicles like aerial drones, he added.

"This needs to be the defence review that puts the Cold War to bed. This needs to be the defence review that changes the way Britain looks at the world around it," Fox said.

"What this is about is shaping Britain for the 21st century, and that is the big cultural shift which I think underpins every bit of thinking of the review that we're undertaking."

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