Cameron and Osborne at war over new Treasury proposals to cut defence . Dispute sparked by fears £ 1billion may be slashed from parliament 's budget . treasury is refusing to guarantee to protect the Armed Forces from cuts . Prime cabinet fears it will damage relations with US President Obama . Row resigned on account of a Tory revolt over defence in the Commons .
Cameron and Osborne at war over new Treasury plans to cut defence . Dispute sparked by fears £1billion may be slashed from MoD 's budget . Chancellor is refusing to guarantee to protect the Armed Forces from cuts . Prime Minister fears it will damage relations with US President Obama . Row revealed on eve of a Tory revolt over defence in the Commons .