British Chancellor of the Exchequer Gordon Brown told parliament £1.75bn ($2.83bn) was available this year to cover military costs, up from the £1bn he set aside in November.

"Nothing should prevent us from equipping and supporting our armed forces," Mr Brown said.

He also acknowledged the economic instability caused by the talk of war.

"This is a time of great risk economically and geo-politically," he said.

The extra funding was announced as the Bank of England scaled back its growth forecasts after warning of the impact a possible war was having on Britain's economic outlook.

War costs

The UN's chief weapons inspectors are due to deliver their latest report to the Security Council on Friday on Iraqi cooperation.

Britain has committed about 42,000 military personnel to a war.

The cost to Britain of a war has been put at between £3.2bn to £3.5bn by the International Institute for Strategic Studies (IISS), about the same amount as the last Gulf War.

In 2002, the UK defence budget was £24bn.

The US estimates its costs will be about $33bn, or 40% of the Gulf War in 1991.