Dr Liam Fox, defence secretary, points to savings made in the aircraft carrier programme:

"I am disappointed that the NAO were not able to produce an agreed report. We inherited a massive defence deficit which included a carrier project that was already £1.6 billion over budget. The strategic defence and security review put this programme back on track and delivered £3.4 billion of overall savings to carrier strike.

"The NAO has noted that our decision to build the second new aircraft carrier makes financial sense, supports UK industry and the significant cost and capability advantages of the aircraft we now plan to fly from it.

"Converting one of the Queen Elizabeth Class aircraft carriers to operate the more capable and cost-effective Carrier Variant of the Joint Strike Fighter fast jet will maximise our military capability and enhance interoperability with our allies. Operating the more cost effective Carrier Variant fast jet will also over the longer-term offset the conversion costs. In the meantime we have rightly assessed that we can rely on our extensive basing and over-flight rights as we are doing to great effect in Libya.

"In addition to the new carrier capability operating the fifth-generation Joint Strike Fighter, our vision for Future Force 2020 includes a Royal Navy operating seven new Astute class submarines, the new Type-26 Global Combat Ship and Type-45 destroyers."