The UK has scaled back the specifications for a new type warship to shrink costs, tackle a record budget deficit and allow more vessels to be ordered, a senior defence source has said.
The specifications of the Type 26 frigate will be partly modified, while costs will be slashed from £500m to £250-300m.
"We want numbers. We want quality, but if you have cheaper unit costs, you can have more of them," the source added.
The Type 26 frigates will replace Type 23, of which there are 13 in service. The reduced cost of the Type 26 would save up to £3.25bn if 13 ships were ordered, according to Reuters.
The UK has cut its defence budget of £36.9bn by 8% in real terms up to 2015, according to a strategic defence review.
The review reaffirmed the government's drive for cheaper, more adaptable and less specialised equipment that is more suitable for export markets.
The Type 26 frigates are being built by BAE Systems under Britain's Future Surface Combatant programme, and are due for delivery in the early 2020s.