Defence Secretary Liam Fox is to launch a crackdown on ballooning costs at the Ministry of Defence (MoD) this week as figures show projects are running £8.8 billion over budget.
In a speech to the Civitas think-tank, Dr Fox will criticise the "conspiracy of optimism" at the MoD and in industry which is "based on poor cost-estimation" and "unrealistic time-scales".
He will warn: "These practices in the MoD would simply not be tolerated in the private sector, and they will no longer be tolerated in the MoD."
And he will call for a "new, frank and honest relationship between government and industry".
The speech comes with the Public Accounts Committee set to announce a report on the MoD's major projects.
The top 15 major procurement projects are £8.8 billion over budget and delayed by a total of 32 years.
This includes the Carrier and Typhoon projects which increased in cost by £3.3 billion last year alone and the A400M aircraft programme which is £603 million over budget and delayed by more than six years.
The Type 45 Destroyer programme is £1.46 billion over budget and delayed by more than three years and aircraft carriers are more than £1.8 billion over budget.
The MoD has had a long track-record of projects running over budget and over time, with the department forced to shoulder the extra costs.
The Government's Strategic Defence and Security Review last October outlined cuts of £4.7 billion over four years, with defence spending to fall 8%.
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