The Department of Defence is studying proposals for another significant cut in the Army and the amalgamation of the Air Corps and Naval Service into a coastguard service, according to military sources.
The report is understood to have come from the Department of Finance as part of its submission to the Defence Group which is preparing a White Paper on Defence due for publication later this year.
According to military sources the Finance proposal is for the reduction of the Army from a three-brigade to a one-brigade structure. The source say this could reduce the Defence Forces from 11,500 to around 8,500.
The Defence Forces only last year completed a voluntary redundancy programme which cut its strength from 13,000 to 11,500. This also entailed a reduction from a five-brigade to a three-brigade structure. The mooted proposals on the Air Corps and Navy would also entail significant cuts. There are currently around 1,100 Naval staff and 600 in the Air Corps.
Meanwhile, the Army is proceeding with plans to improve its front-line fighting ability with the acquisition this year of 40 armoured personnel carriers (APCs) which would allow the Army to serve on peace-keeping duties with the NATO-led Sfor (Stability Force) in former Yugoslavia and on training exercises with the European PfP (Partnership for Peace) military alliance.
There are pressures for cuts in Defence expenditure arising from the mounting levels of compensation claims for alleged hearing and other injuries.
Last week a former soldiers was paid £219,000 for stress. Following other large compensation payments last year the Minister for Defence, Mr Michael Smith ordered the closure of five Army barracks.