By our political correspondent at the Lib Dem Party Conference

Paddy, Lord Ashdown, the former EU High Representative in Bosnia, has told Liberal Democrats at their annual conference in Bournemouth that the UK has a huge "black hole" in its defence spending plans. He also said that France faces a similar crisis, and called on the two countries to collaborate more closely in defence procurement.

In a budget of £32 billion (2.5% of GDP) he said that the real shortfall is £10 billion a year. To bridge it would require spending to rise to 3.3% of GDP – impossible – or cuts in major programmes. But such cuts would only bridge half the gap. He said that the true nature of the crisis would not become apparent until after the General Election, when a defence and security review would get under way.

He called for a radical overhaul in the structure of Government , and for the defence industry to wake up to the implications of the crisis. He reiterated that the Liberal Democrats would not replace or renew Trident, but would keep a nuclear deterrent via a cheaper option. Such a decision would also become necessary shortly after the General Election next year.

Afghanistan operations mark the beginning of the end of a dominant West. It is a symptom of global turbulence during a switch in power from West to East. Never again would there be intevention in countries without China, India and other emerging powers being involved. He also forecast trhat the next major war would be in the Far East, where mercantalist pressures similar to those in the 19th century were building up.

While the US would continue to be our (and Europe's) friend, it will have other interests and is looking to the East more. He stressed that Russia was highly assertive, but that its apparent strengths hid weaknesses. It is absolutely essential to deepen European institutions, with greater co-operation between the 3 largest nations UK, France and Germany. He also condemned the attitudes of the Conservatives, who, he said, will have to deal with the realities of the world if elected, rather than their own insular views.

For more on this topic, see this article published in the Guardain.