Funding for up to eight Type 83 destroyers and five Type 32 frigates is said to have been pulled
Sir Keir Starmer has abandoned plans to replace ageing naval vessels, opting instead to prioritise drone technology within Labour's anticipated Defence Investment Plan (Dip).
The replacement of 13 ageing Royal Navy warships were to form part of the Dip, but funding for up to eight Type 83 destroyers and five Type 32 frigates is said to have been pulled.
The Royal Navy's current Type 45 air defence destroyers had been scheduled for retirement by the late 2030s, with Type 83 vessels intended as their successors.
Meanwhile, Type 32 frigates remain at the conceptual stage and were designed to serve as platforms for deploying mine-hunting and anti-submarine drones.
Under the revised strategy, drone technology and autonomous vehicles will receive funding instead, as ministers seek to modernise Britain's military capabilities in response to escalating threats from Russia.
Shadow Defence Secretary James Cartlidge condemned the move, telling the Daily Express: "This is all too little, too late from Labour on defence."
The Conservative frontbencher argued that Labour's repeatedly postponed defence strategy will contain barely any additional funding compared to its predecessor.
"So it's no surprise we are hearing reports of capabilities being scrapped, just at the time we are meant to be strengthening our Armed Forces," Mr Cartlidge added.
To address the shortfall of serving vessels, ministers are establishing an "uncrewed systems taskforce" at a drone facility in Swindon, according to The Times.
Former Defence Secretary John Healey departed his cabinet position earlier this month after the Dip was set to deliver just £13.5billion in additional military investment, which he described as falling "well short" of requirements.
In his resignation letter, Mr Healey warned the funding level would make Britain "less safe."
Reports indicate that a relatively low £1billion has been added to the plan since his departure.
Mr Cartlidge attributed the funding shortfall to the Government's spending priorities and said: "As is now glaringly obvious, the lack of cash on offer for defence is because Labour prioritised welfare spending over properly funding our military."
Still, the outgoing Prime Minister intends to press ahead with releasing the Defence Investment Plan ahead of a Nato summit on July 7.
The push comes despite major policy and spending decisions being halted across Whitehall, in anticipation of a new prime minister taking office in the coming weeks.
This decision could create tensions with his likely successor, Andy Burnham, who may wish to allocate military funding priorities with his new cabinet.
The Government maintains it is delivering a generational boost to defence spending, with £270billion in additional funding across this parliament.
Just yesterday, Chancellor Rachel Reeves pledged that the Dip would be published "imminently", and vowed for more money to the armed forces after the clear message sent by Mr Healey's resignation, alongside ex-defence minister Al Carns.