Prime Minister David Cameron has announced a £1.1 billion cash injection for defence ''to help keep our country safe and stop terrorism at source''.
He said defence nowadays was ''not about battle tanks in central Europe'' but about ''modern threats''.
On a visit on the opening day of the Farnborough air show in Hampshire, Mr Cameron said the money had become available as the coalition government has been able to ''close the black hole in the defence budget that it had inherited''.
He went on: ''There are threats that you cannot defend against from the White Cliffs of Dover.''
The funding pot includes an extra £800 million of investment in an intelligence, surveillance, target acquisition and reconnaissance package which will bolster special forces' ability to deal with the threat of global terrorism and hostage taking.
A further £300 million will be used for existing programmes, including unmanned aircraft and next generation radars for Typhoon combat jets.
Visiting aircraft stands and meeting defence and aviation business leaders at Farnborough today, Mr Cameron also announced plans to set up a UK Defence Solutions Centre in Farnborough to develop new defence technology.
A £4 million UK Centre for Maritime Intelligent Systems based in Portsmouth is also being launched which will see the development of a hi-tech unmanned submarine.
Also a ''defence apprenticeship trailblazer'' scheme to attract new graduates to the industry as well as develop a new masters level standard in advanced systems engineering.
Speaking on board an Airbus A350 aircraft that will come into service with Qatar Airways at the end of this year, Mr Cameron said: ''This money will help keep our country safe and stop terrorism at source before it reaches our country.''
Later, addressing business leaders at the show, he said: ''National security is the very foundation of national prosperity, especially if you live in such a dangerous, uncertain world.''
He said the Portsmouth centre would be ''a new chapter in Portsmouth's incredible naval story''.
Mr Cameron had been due to see the new F-35 fighter aircraft at Farnborough today - but embarrassingly it has still not been given clearance to fly by the Americans following an engine fire in Florida last month.
The grounding meant the jet was also unable to appear when the Queen named the Royal Navy's new aircraft carrier Queen Elizabeth earlier this month, and at a military tattoo at RAF Fairford in Gloucestershire this weekend.
''The aircraft is still awaiting US clearance but we are hopeful that it will fly at the air show by the end of the week,'' a spokesman for Farnborough airshow said.
''Everyone involved in the project is working towards a positive result for attendance at the air show this week, and we fully support the stance to never compromise safety of either pilots or show participants and we thank them all for their continued hard work.''
Commenting about the absence of the aircraft Mr Cameron said: ''Obviously it will be disappointing if it is unable to come to the show. But it's a highly-complex plane and I am very confident it will be fine and will help Britain's safety for the next 50 years.''