Defence chiefs had to cut projects for helicopters, warships and Nimrod spy planes after Gordon Brown "guillotined" their budget, the Iraq inquiry has heard.
The former top civil servant at the Ministry of Defence spoke of the "crisis period" when Mr Brown as Chancellor suddenly slashed military spending six months after the March 2003 invasion of Iraq.
Sir Kevin Tebbit said the MoD had to launch an "across-the-board major savings exercise" to meet the Treasury's "arbitrary" cuts.
Projects affected included helicopters, Nimrod spy planes, Royal Navy destroyers, frigates, minesweepers and patrol vessels, Challenger tanks, AS90 artillery and Jaguar aircraft, he told the inquiry.
The MoD also had to reduce numbers of Armed Forces personnel and civil servants.
Sir Kevin, who was MoD permanent secretary from 1998 to 2005, stressed that defence chiefs saved resources needed for Iraq but admitted the cuts had a long-term impact.
He said: "I was running essentially a crisis budget rather than one with sufficient resources to be able to plan as coherently, as well for the long term, as we would have liked."
