The UK's armed forces are so stretched that there is "serious concern" about whether the defence budget is adequate, a Commons all-party report has said.

An imbalance between global commitments and resources mean the military risked "stumbling from one crisis to the next", the defence select committee report said.

And the committee said the problem was threatening the success of the changes in the forces laid out by the Strategic Defence Review (SDR) of July 1988.

In a report containing a series of warnings about defence funding, the committee said: "The cumulative evidence of cancelled exercises, delayed equipment programmes and of resources apparently insufficient to reverse the problems of overstretch and undermanning suggest that if the wheels have not yet come off the SDR, they are certainly beginning to wobble alarmingly.

'Dithering'

"Commitments and resources have to be brought back into line, or we risk finding ourselves stumbling from one crisis to the next."

The Ministry of Defence's budget for 1999/2000 was £22.3bn.

The committee, chaired by Walsall South Labour MP Bruce George, said last year's Kosovo conflict had highlighted that the forces had a "severe lack of strategic lift capability" and accused the MoD of "dithering" over choosing a new heavy lift aircraft.

MPs said commitments, such as the £400m-plus Kosovo deployment, had led to the cancellation of major training exercises.

The report said: "Without regular exercises for high intensity conflict, standards in our armed forces will plummet, whatever the quality of the people and equipment."

But the committee said the biggest problem was that British forces - currently deployed in places as far afield as Northern Ireland, Germany, the Falklands, the Balkans, Belize and over the Iraqi no-fly zones - were overstretched.

'Damning indictment'

The report said: "With a constrained defence budget, this makes for hard choices - we are yet to be convinced the government is prepared to face up to these choices and engage in open debate about priorities between them."

The report said there must be improvement on a situation where the problems of undermanning and overstretch appeared to have got worse since the defence review.

The combined trained strength of the Army, Navy and RAF is 189,772, compared with a requirement of 198,727.

Defence Secretary Geoff Hoon responded: "This is a very disappointing report which fails to recognise fully what our armed forces have achieved.

"There is no question of the SDR wobbling or it being unaffordable. The committee's report unfortunately came too early to reflect the fact that the MoD's budget has just been increased by nearly £600m to take into account the costs of the Kosovo and Bosnia operations.

"We were clear from the start that the SDR would take time to implement fully, but enormous changes have already been made."

Shadow defence secretary Iain Duncan Smith said the report was a "damning indictment of Labour's defence policy."

He said: "It rams home how the Government have been glossing over the serious financial difficulties faced by the forces."