Labour has accused ministers of touting a "fictional" claim that they were bequeathed £38bn of unfunded spending commitments in the defence budget by their predecessors.
Defence Secretary Philip Hammond announced in May that the Ministry of Defence had eliminated a £38bn "black hole" in finances as a result of the government's savings, including redundancies and procurement changes.
But shadow defence minister Kevan Jones opened an opposition-led debate on defence reform on 26 June 2012, telling MPs that this figure was a "completely erroneous myth".
Under the Strategic Defence and Security Review (SDSR), announced in 2010, the navy and air force have to cut 5,000 jobs each, the Army 7,000 and about 25,000 civilian staff working at the MoD face redundancy.
"It's becoming clear to many that the secretary of state has balanced the budget on the backs of our brave servicemen and women," Mr Jones told the Commons.
Defence Minister Nick Harvey accused Labour of leaving the armed forces "over-stretched, under-funded and under-equipped for the tasks they were set".
He said: "They wrecked the economy, they wrecked the defence budget and they failed to make the changes necessary to prepare our armed forces for the future."
The £38bn figure had been given to ministers by MoD officials, he said.
At the end of the debate, MPs rejected a Labour motion calling on the government to reassess the Strategic Defence and Security Review, and expressing concern at the rate of redundancies in the armed services, by 294 votes to 210 - a government majority of 84.
There are 20 opposition days allotted in each Parliamentary session. This is the third allotted day of opposition debate in this session.