Analysis: how David Cameron's armyshambles unfolded - Telegraph.co.uk

"The precise budgets beyond 2015 will be agreed in future spending reviews," he said. "My own strong view is that this structure will require year-on-year real-terms growth in the defence budget in the years beyond 2015."

For the next two years, the Armed Forces and the Ministry of Defence laboured to make the cuts set out in the SDSR. During that time, defence chiefs made a number of public warnings that their plans would only be sustainable if spending rose again after the current spending round.

So George Osborne's Autumn Statement in December left the chiefs surprised and worried. The Chancellor announced that he was seeking more cuts in defence spending. Under the plans set out in the 2010 Spending Review, defence spending in 2014/15 would be £33.5 billion. The Autumn Statement cut that to £33 billion.

What worries defence chiefs and ministers alike is that the lower figure will now form the "baseline" or starting point for defence spending in 2015/16. Having expected defence spending in that year to be higher, in real terms, than £33.5 billion, they now face the prospect of a budget that is either modestly above – or even somewhat below -- £33 billion. And whether higher or lower, that would almost certainly be a sum smaller than the one on which they based their plans.

And that prospect forced defence chiefs to consider the consequences of another squeeze on spending after the current spending round. Those painful private discussions have raised the possibility of reopening the SDSR and making yet more cuts.

Military fears were only heightened by the hardline message from the Treasury about this year's Spending Review, which will set budgets for 2015/16. Mr Osborne and his team were clear: with the public finances still worse than expected, the MoD could not expect to escape a fresh round of austerity.

On Wednesday this week, the defence chiefs' fears were revealed on the front page of the Daily Telegraph: fresh cuts would mean even smaller Armed Forces, and a shrunken defence establishment would struggle to generate top-quality Special Forces like the SAS.

That revelation sharpened concern among Conservative MPs about defence spending, and left Mr Cameron facing an apparently simple question: did he stand by what he said in 2010 about "year-on-year real-terms growth in the defence budget in the years beyond 2015"?

By Wednesday afternoon, the Prime Minister was in Algiers for talks following last month's hostage crisis, talks in which he offered Algeria the services of none other than the SAS to improve its counter-terrorism operations.

That offer was a small part of Mr Cameron's wider move to increase British military activity in north and west Africa, his contribution to a "generational struggle" against Islamic extremists.

In that context, it is perhaps understandable that Mr Cameron would want to proclaim his support for the Armed Forces. Asked by the Daily Telegraph if he stood by his words in 2010, the Prime Minister was clear: he did not "resile" from what he had said.

The comment was made in what was initially an "off-record" briefing, but Mr Cameron's aides told reporters in Algiers they were happy for the remark to be reported. For good measure, No 10 staff called journalists in London to make sure the message was clear: Mr Cameron was committed to higher defence spending in the coming Spending Review – even if that put other departments' budgets under greater pressure.

Yet any relief over that was short-lived. This morning, No 10 started to backtrack, offering a new version of events: when he suggested higher defence spending, Mr Cameron had not been referring to 2015/16, but to some period after that.

Complicating matters further, Philip Hammond, the Defence Secretary, used a series of broadcast interviews in London to offer his own take: the only promise made over defence spending, he said, is that the budget for equipment will rise by 1 per cent in 2015/16 and the following years.

In television interviews in Libya this afternoon, Mr Cameron repeatedly ducked questions about the overall defence budget and would only talk about spending on vehicles and kit: "We have protected the defence equipment budget post, up to and after 2015," he said.

That, of course, suggests cuts to the other half of the defence budget, the portion that covers manpower. Always sensitive over military matters, Mr Cameron is acutely aware of the potential backlash if he forces yet more military redundancies even as he orders fresh African deployments.

And having repeatedly flayed Gordon Brown for duplicity over defence, Mr Cameron knows that there is an ever higher price to be paid by a Prime Minister who cuts the Forces and isn't honest about it.