New Defence Secretary Dan Jarvis should demand at least £18 billion extra from the Treasury as a condition of signing off on the long-awaited defence investment plan, Whitehall sources have said.

The former Parachute Regiment officer, who has been security minister since the 2024 general election, was appointed after John Healey dramatically quit on Thursday in protest at the lack of funding for the Defence Investment Plan.

He was promised an extra £13.5 billion, less than half of the £28 billion Army chiefs said they needed.

This triggered a resignation letter in which Mr Healey said he had been left with ‘no other option’ after learning that defence spending will go up from 2.6 per cent of gross domestic product next year to just 2.68 per cent in 2030.

Mr Jarvis has been given an additional two weeks to review the proposals before the plan is published before a Nato meeting on July 7. 

Now defence sources have said he should refuse to agree to the plan unless the extra funding hits £18 billion.

A source said: ‘The Strategic Defence Review included 62 recommendations for new equipment, which was costed at £28billion.

‘[Chancellor] Rachel Reeves said it could only offer the Ministry of Defence £10 billion, with a further £3.5 billion to be made from “efficiency savings” based on the retirement of warships, bases and aircraft.

‘That is nowhere near enough and the bare minimum which would work, and Dan should accept, is £18 billion.’

In his letter, Mr Healey said the funding settlement would have forced him ‘to make decisions that would reduce the readiness of our Forces and increase the risk to personnel on operations, and could make the country less safe’. 

In his reply, Sir Keir Starmer said he was ‘proud of our record on funding’.