PLANS to build two new aircraft carriers that have prompted a massive reorganisation of Hampshire's shipbuilding industry may now be shelved due to a funding crisis at the Ministry of Defence, MPs have warned.

The £4 billion project could be the most high profile victim of pressures on the MoD's equipment budget, which are so great the Commons Defence Committee said it may prove impossible to resolve them simply by scaling back or delaying orders.

Any move to postpone or axe the project could have a major impact on the job prospects of hundreds of people in Hampshire which are riding on the fortunes of the two carriers, which are due in service by 2012 and 2015.

The MoD has acknowledged that all the projects in its major equipment programme are coming under scrutiny in a "planning round" described as more "challenging" than any since the 1970s.

Hampshire defence companies VT and BAE have agreed to pool their shipbuilding interests into a joint venture in order to undertake the massive project, but the deal hinges on the order for the carriers being made. Construction of the carriers would be the main work of the joint venture, which would be expected to have a turnover of more than £700m and to employ about 6,850 people, including 600 staff at its £50m state-of-the-art shipbuilding facility in Portsmouth.

Difficult decisions' MPs also called on the MoD to explain why it found itself in such difficulties with its equipment programme at a time when the overall defence budget was increasing in real terms.

"The MoD needs to take the difficult decisions which will lead to a realistic and affordable equipment programme," it said.

"This may well mean cutting whole equipment programmes, rather than just delaying orders or making cuts to the number of platforms ordered across a range of equipment programmes."

The committee pointed to two projects currently in the assessment phase - a new fleet of support tankers for the Royal Navy and a replacement for the RAF's Lynx helicopter - which could be vulnerable if there were wholesale cuts.

MPs said three major military projects - the Nimrod MRA4 aeroplane, Astute submarine and the Hampshire built Type-45 destroyer, had together accumulated delays totalling almost 14 years and cost overruns of £2.9 billion.