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An independent review of the way the Ministry of Defence buys military equipment has delivered a devastating critique of cost overruns and poor planning.
The review by Bernard Gray was commissioned last year by then-defence secretary John Hutton.
In a sharply-worded analysis, it slams civil servants, senior members of the armed forces, politicians and industry executives for failing to recognise the spending constraints Britain faces.
The study found that that on average defence programmes are five years late into service and cost an extra £300m as a result.
It said the Ministry of Defence "has a substantially overheated equipment programme, with too many types of equipment being ordered for too large a range of tasks at too high a specification".
"This programme is unaffordable on any likely projection of future budgets," the report warned.
Gray identified a procurement 'bow wave' in which spending peaks are permanently pushed beyond the 10-year period of financial planning at the department.
He said that "it now seems clear that the very existence of this bow wave is itself a significant contributor to the problems that have plagued defence procurement over a long period".
"In reality, the bow wave allows the MoD to maintain a position that a whole variety of defence capabilities are in the process of being procured.
"This feels reassuring to the country about the size and scope of Britain's armed forces, but behind this comforting thought is the cold fact is that the budget does not exist, and has arguably not existed since the end of the Second World War, to support this level of ambition.
"The policies of successive governments, and a lack of political will to present to the electorate the unpleasant reality of the position, has been a significant force behind this double-think.
"So too has the fact that the Cold War allowed the fiction to be maintained, because there was no fighting to expose the weaknesses in the system, and because the Warsaw Pact had similar problems.
"It is equally true that ministers, the armed forces, and civil servants did not rush to confront the problem either."
Gray identified a need to bring equipment plans into line with likely available resources, and a need to improve equipment programme planning, management and delivery.
He called for "routine strategic defence reviews, to be conducted in the first session of a new parliament, as a mechanism to ensure periodic 'resetting' of the MoD's plans".
The report also highlighted structural problems within the MoD that contribute to the culture of overspending.
"If any significant change is to be achieved, all constituencies, political, military, industrial and administrative would have to act in the wider national interest. This is a tall order," Gray said.
Defence minister Lord Grayson said that the MoD accepts "most of his recommendations and are getting on with implementing them".
"Bernard and his team have done a thorough job," he added.
"They have done a comprehensive review of defence acquisition and have come up with a strong package of measures to ensure the right equipment is delivered in the most efficient way.
"Quite simply, we accept most of his recommendations and are getting on with implementing them alongside broader work to develop a future strategy for defence acquisition.”
The new strategy will be published in January 2010.
Dods Parliamentary Communications Ltd