£1bn contract for UK nuclear submarines to be announced
A £1bn contract for reactors for the next generation of the UK's nuclear-armed submarines is to be announced.
The deal is part of plans to replace the Vanguard fleet, which carries the Trident nuclear deterrent.
The work will be carried out at the Rolls-Royce factory at Raynesway, Derby, securing 300 jobs.
Defence Secretary Philip Hammond said the government was "committed to maintaining a credible nuclear deterrent".
But he said the final decision on replacing Trident would not be made until 2016.
The Ministry of Defence has already set aside £3bn to begin work on the new submarines to replace the Royal Navy's four Vanguard class boats.
The additional money will go towards refurbishing the Rolls-Royce facility and developing the reactors.
It will fund two reactors, one for the seventh Astute Class attack submarine and one for the first of the new nuclear deterrent submarines.
The Conservatives want to replace the UK's existing Trident submarines by 2028 but the Lib Dems are against a direct swap.
Nick Harvey, a Lib Dem defence minister in the coalition, has been looking at the possibility of cheaper alternatives.
BBC defence correspondent Jonathan Beale said the decision to push ahead with the project was likely to cause strains in the coalition.
The final decision on replacing Trident will not be taken until after the next general election, although billions of pounds will already have been spent on its successor by then.
Last month, the MoD awarded £350m of contracts for the next generation of submarines to BAE Systems, Babcock and Rolls-Royce.
Mr Hammond will make the latest announcement on Monday.
In an interview on the BBC's Sunday Politics show, he said: "What we're going to be announcing is a commitment to the major refurbishment of the plant at Rolls Royce in Derby which builds these core reactors, not just for the nuclear deterrent submarines but also for our attack submarines, the Astute Class submarines.
"This is sustaining a sovereign capability in the UK and some very high-end technical skills in the UK for the next 40 or 50 years.
"The government's policy is very clear - we're committed to maintaining a credible nuclear deterrent and we're placing orders now... for the long-lead items that will be necessary to deliver a successor to the Vanguard Class submarines in the late 2020s.
"But the decision on whether to build them won't be taken until 2016 - what we're doing now is ordering the things we have to order now to give us that option."
Sir Menzies Campbell, former Lib Dem leader, described the plans as "sensible".
He told the BBC: "The position of the Liberal Democrats before the last general election was that the cost of a like-for-like replacement of Trident was so great that it was necessary to examine alternatives...
"That [review] is not affected by this announcement and even if there was no Trident submarine programme we would still have had to upgrade these facilities [at Derby] in order to ensure that the reactor cores for the Astute Class... were being properly constructed and in a safe environment."
Britain's nuclear weapons system is made up of four submarines, based at the Faslane naval base on the Clyde, which can deploy Trident ballistic missiles carrying nuclear warheads.
In March, Scottish National Party conference delegates passed a motion committing the party to the removal of the nuclear weapons system under an independent Scotland.
When asked about potential job losses if a Trident replacement project did not go ahead, Bruce Crawford, the Scottish government's strategy secretary, told the BBC: "This isn't about jobs it's about the obscenity of spending £100bn on a weapons system that's no longer required, that's not an economic proposition and is morally unjustified."