The government's policy of "propping up" the defence industry has been criticised by four think tanks which say the taxpayer is paying at least £450 million per year subsidising arms exports and further billions protecting jobs.

Ministers have let short-term political considerations override the need to get the best equipment, says a report being launched tonight by the Policy Exchange, a right of centre group.

Procurement policy is also criticised in a separate report by three think tanks.

The British American Security Information Council, the Oxford Research Group and Saferworld say decisions are being distorted by government subsidies for arms exports.