The Royal Navy's new aircraft carriers will cost more than £6bn after further cost overruns due to be announced by the Government.
Defence Secretary Philip Hammond is expected to announce the projected cost of the two carriers, which will not enter service until the end of the decade, has risen by another £800m to £6.2bn, the Financial Times reported.
The latest increase means the bill for the 65,000-tonne ships will be almost double the £3.5bn estimated when the programme was agreed by the last Labour government in 2007.
Hammond is expected to attempt to deflect concerns about the rising costs by announcing that he has re-negotiated the project to build the carriers on terms more favourable to the taxpayer.
The Financial Times said he is expected to say that further cost overruns beyond the new £6.2bn baseline will be split 50-50 between the Ministry of Defence and the contractors – whereas previously they had fallen mainly on the Government.
An MoD spokesman said: "Negotiations between the MoD and the Aircraft Carrier Alliance regarding the re-baselining of the Queen Elizabeth Carrier Programme are at an advanced stage. No final decisions have been taken and the department will make an announcement in due course."
The cost increase is the latest setback for the troubled carrier programme. The coalition announced in the 2010 Strategic Defence and Security Review that it intended to switch from the jump-jet version of the US-built Joint Strike Fighter planned under Labour to the more capable carrier variant.
However it was forced to carry out an embarrassing U-turn after it emerged the cost of fitting the necessary catapults and arrestor gear – the so-called cats and traps – would be prohibitively expensive.
For Labour, shadow defence secretary Vernon Coaker said the Government needed to explain the cost increase.
"This is the latest in a series of financial fiascos in the MoD under David Cameron," he said. "Last year, the Government wasted £100m by changing its mind about the type of fighter planes it was ordering for the aircraft carrier and reverting to Labour's plans which it said were more cost effective.
"The Defence Secretary's claim that he has balanced the MoD books looks increasingly nonsensical. Britain deserves better than this shambolic approach to our nation's defence."