A major paper by Policy Exchange urged the PM to to announce a contingency plan that would allow Britain to raise defence spending to 3 per cent “should the geopolitical situation demand it”.
The rallying cry – backed by ex-Defence Secretary Sir Michael Fallon – comes ahead of this week’s crunch Nato summit in Brussels and Mr Trump’s visit to the UK on Thursday and Friday.
The report said the two events gave Mrs May the perfect backstop to announce the funding boost.
It would put the UK front-and-centre of European security policy, the study said.
And doing so this week would “enable the UK to lead the way to quell American concerns about the failure of European partners to commit more funds” to security on the continent.
Professor John Bew, author of the report, said the UK must lead the way in rubbishing the “misconception, misunderstanding and deliverbate subversion” of Nato and singled out Mr Trump and Labour leader Jeremy Corbyn for spreading damaging myths about the military alliance.
The call comes amid heightening fears that Mr Trump will withdraw US troops or funding from Nato. There are currently 65,000 US military servicemen in Germany, Italy, the UK and other European countries.
But the US President’s meeting with Russian President Vladimir Putin has sparked fears he will offer to station fewer troops on the continent.
Against that backdrop, the Policy Exchange report said: “If the UK government takes the health and survival of Nato seriously, the absolute bare minimum it must do is to commit to a graduated increase in defence spending that breaks free from the 2 per cent threshold, while also signalling a willingness to make further leaps towards 3 per cent should the geopolitical situation demand it.
“This will enable the UK to lead the way to quell American concerns about the failure of European partners to commit more funds to their own national defence, both at the summit and during President Trump’s visit next weekend, to put the vital relationship with the United States on a firmer long-term footing.”
It added: “After Brexit, the UK’s commitment to the defence of Europe should continue through the Nato framework, and the UK should discourage any further attempts at against closer EU defence integration that duplicate or compete with the transatlantic alliance.
“The UK must also be a forceful advocate for a revived twenty-first century western alliance, given that the biggest threats to Nato’s cohesion currently come from within.
Apathy, historical amnesia and wishful thinking are three enemies of Nato that need to be tackled head on by government and all political parties.”
Sir Michael – who served as Defence Secretary for three years – and former Nato chief Lord Robertson wrote a joint forward to the Policy Exchange report stepping up the pressure on Mrs May to boost Britain’s contribution to Nato.
They wrote: “Our government and our political classes have a responsibility to remind people of Nato’s historical purpose and all the advantages it has brought to the West, in general, and the UK, in particular.
“Complacency, apathy and lazy criticism of the Alliance needs to be tackled head on. By banding together, Nato members have saved incalculable amounts in blood and treasure.
“Ultimately, Nato should not be seen as an unwelcome strain on the public purse – or an awkward relic of the Cold War era – but instead as the most enduring and fruitful multi-nation alliance in history, a triumph of British diplomatic ingenuity, and a guarantor of prosperity and security at a record low historical cost.”
Last night it emerged that the UK has privately urged Germany to up its Nato spending by counting investment on railways and bridges towards their defence spending.
Defence Secretary Gavin Williamson was said to be pushing for a "more imaginative" way of defining what Nato classes as defence spending.
He also wants Germany to spend more money on military helicopters, trucks and ferries, according to The Times.
The move is aimed at calming Mr Trump's anger at EU countries for failing to spend enough money on Europe's defence and security.
Gav's cash war
An independent study by ex-minister Philip Dunne says defence industries have an annual turnover of £22billion and support 250,000 jobs as well as 25,500 apprenticeships.
Mr Williamson, battling for more cash for the Ministry of Defence, said it “shows how vital” such spending is, “protecting Britain from global dangers and safeguarding our national prosperity and economy”.
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