Officials at Britain's defence ministry have put together proposals that would dramatically reduce the Royal Navy's fleet, the Sunday Telegraph reported on its website.

Citing details e-mailed to it by a source within the Ministry of Defence (MoD), the newspaper reported that because of strains on the MoD's budget in upcoming years, five warships could be decommissioned from April.

The source told the paper that the cuts would reduce the Royal Navy's capacity to just "one small-scale operation".

According to the source, the government's Comprehensive Spending Review (CSR), which allocated an annual increase in defence spending of 1.5 percent above inflation, sparked rows between senior MoD officials and junior finance minister Andy Burnham.

In addition to that, commitments to buy two aircraft carriers at a total cost of four billion pounds (5.7 billion euros, 8.1 billion dollars) forced the MoD to tighten its belt, the Telegraph said.

"The Chief Sec (Chief Secretary to the Treasury Burnham) directed that no further money from the CSR would be allocated to defence and to maintain force levels the dept must find the savings/cuts," the source told the newspaper.

"For the RN (Royal Navy), the poor CSR deal and the commitment to two carriers is such that a proposal for the immediate decommissioning of five ships (frigates and destroyers) from April next year has been considered.

"This would reduce the RN's capabilities to just one small-scale operation and that is it."

The source also provided an internal MoD briefing paper that said that, assuming no further commissioning of ships, the combined size of the Royal Navy and the Royal Fleet Auxiliary could fall from its current level of 103 to 50 within 20 years.

An MoD spokesman did not confirm the report.

"No decisions have been taken to make changes to force structures," he said.

"As ever, we continually review the defence programme. The CSR settlement sees the continuation of the longest period of sustained real-terms growth in planned defence spending since the 1980s."

MoD sources cited by Britain's domestic Press Association also dismissed the idea that the Royal Navy's capacity could fall by more than half, and said that documents such as those cited by the Telegraph's source were produced as a matter of routine.