Britain has received a request from the United States to help set up a planned missile defence shield, but has yet to respond.
Britain has been asked to approve the upgrading of early warning systems at Fylingdales in northern England to allow the US programme to go ahead.
The announcement came as President George W Bush ordered the US military to begin deploying a national missile defense system. Officials said the plan initially involved deploying 10 interceptor rockets at a base in Alaska by 2004.
"I have today received a letter from United States Secretary of Defense Donald Rumsfeld requesting UK agreement to upgrade the early warning radar at RAF Fylingdales for missile defence purposes," UK Defence Secretary Geoff Hoon said in a statement.
"The government will now consider the US request very seriously, agreeing to it only if we are satisfied that it will ultimately enhance the security of the UK and the NATO alliance," he said.
Mr Hoon is expected to give Washington an answer in the New Year. Experts say it is highly unlikely he will refuse.
The government has been preparing the ground for an announcement for some weeks.
Last month, Mr Hoon declared missile defence could strengthen global stability and deter attack by "rogue states".
And last week, a Ministry of Defence discussion paper spelt out how a missile shield might work, its possible deterrence effect, the costs involved and what Britain's input might be.
"The government believes that the developing ballistic missile threat is one that we must take very seriously," Hoon said. "We could not wait until a specific threat became clear before determining how to defend it."
If the government agrees, Blair will face serious opposition from within the Labour Party.
In a first step towards setting up a missile defence umbrella, the US in June unilaterally withdrew from the 1972 Anti-Ballistic Missile (ABM) treaty which banned such systems.
The move worried US allies and led to protests in the Labour Party, many of whose members are vehemently opposed to closer military links with Washington and argue a missile defence shield could spark a new global arms race.
The system, dubbed "Son of Star Wars" after an initiative pioneered by former US President Ronald Reagan, depends on intercepting an incoming missile with another missile.