Defence chiefs and ministers debated strategic review
Defence chiefs have met Prime Minister David Cameron and government ministers to discuss the future shape and size of Britain's armed forces.
The National Security Council's two-hour meeting considered options for the strategic defence and security review - but did not reach any final decisions.
The RAF's Tornado force, two planned aircraft carriers and the size of the Army were discussed.
Mr Cameron said the review needed to be driven by strategy, not just spending.
The council is expected to meet again after the Tory Party conference next week, with the review due to report in October.
At the meeting, David Cameron apparently made it clear the highest priority must be the needs of current operations in Afghanistan, BBC defence correspondent Caroline Wyatt said.
He was also said to have stressed the importance of ensuring military capabilities were matched to future potential threats.
The meeting was attended by both the outgoing chief of the defence staff, Air Chief Marshal Sir Jock Stirrup, and his successor as the head of the armed forces, General Sir David Richards, who will have the job of implementing the review's conclusions.
On Monday, Foreign Secretary William Hague said the defence budget - over-committed by £38bn over the next decade - must be dealt with.
A report by the think tank Policy Exchange, to be released on Thursday, suggests that the Army could save money by building up its bank of Territorial Army reservists.
Earlier, Lt Col Richard Williams, a former commander of the SAS and one of the authors of the report, told the BBC: "If you are doing a complex intervention such as southern Iraq or Afghanistan, you get an awful lot from somebody who has been a bank clerk or has an alternative employment and is not a full-time soldier."
It is understood the review will put Afghanistan first, with current operations ring-fenced and much of the Army's manpower spared until at least 2015, when the UK's combat operations in the country should have finished.
"That means the Royal Navy and Royal Air Force would bear the brunt of the cuts this time round," our correspondent said.
She said everybody had been fighting their corner hard but there were some pretty tough options on the table including cuts to the Royal Navy's surface fleet and some of the RAF's fast jets.
Many in the Armed Forces had been deeply dismayed at the speed at which the review was being undertaken, as well as by what they see as a lack of open and public debate at the scale of some of the potential cuts, she added.
But no date has been set for the meeting that will take the final decisions.
The review began after the general election. The last review, in 1998, took more than a year.
It is designed to look at the UK's role in the world, evolving threats to the country's interests, the nature of the UK's response to such threats and whether the armed forces are equipped to deal with future challenges.
Prof Michael Clarke, from the defence think tank the Royal United Services Institute, told BBC's Today programme that the UK intended to remain a global player on the world stage and retain a close relationship with the US.
He said: "This is the Asian century and it's coming upon us pretty quick. The United States is a lead player in moderating the effect of that Asian century on the western powers.
"We have a stake as a global player, we have a stake as an Anglo Saxon player in staying close to the one remaining superpower which will be struggling for its influence over China and India and Japan."
Annual defence spending in the UK currently stands at about £37bn, which is around 2.5% of GDP. Cuts of 10-20% are expected as part of the government's austerity measures to reduce public spending.
Speculation on possible cuts has ranged from the scrapping of new aircraft carriers to grounding the RAF's entire fleet of more than 70 Tornado jets years earlier than planned.
Lt Col Williams said up to 40% of American high-end special operations activity in Iraq and Afghanistan was carried out by national guardsmen.
He said: "The fact that they cost broadly and, this is an approximate figure from public accounts, one fifth of a regular capability to maintain - you can see there are advantages."
He added: "We're finding in the main, is that across society, the younger civilians - or those who have been operating in the wider non-military world are much quicker at picking up the transformation technology systems and concepts than those who have been drilled in armoured warfare on the north German plains."
Our correspondent said the UK's nuclear defence system Trident was not officially on the agenda of the meeting but it could come up in discussions.
She said: "It does seem to appear that for the time being the coalition have put off that decision until 2015, until after the next election."
Earlier this month, the chairman of the Defence Select Committee expressed concern over the speed of the review, saying it could put combat operations and UK security at risk.
James Arbuthnot, a Conservative MP, said his committee was worried the process was money-driven and not taking time to assess the threats to the UK.
Defence Minister Nick Harvey acknowledged the pace of the review was influenced by economic circumstances but said it was a "big picture" exercise that drew on debates that had been going on for some time.