Billions could be saved by scaling down Trident (Reuters) - Britain may be able to save about 11 billion pounds in defence costs if it were to end its policy of keeping at least one nuclear armed-submarine at sea at all times, a prominent defence think-tank said. Defence spending is a prime candidate for cuts as Prime Minister David Cameron seeks ways to reduce a budget deficit set to reach 163 billion pounds this financial year. Cameron's government outlined plans on Thursday to reduce the deficit, before an emergency budget due on June 22, including cutting defence ministry running costs by 25 percent. Controversy has swirled around Britain's submarine-based nuclear weapons system, or Trident, with the Liberal Democrat party, the junior partner in the new coalition government, arguing that it should be replaced with a cheaper alternative. The Conservative Party, the coalition's senior partner, wants to keep Trident. Britain plans to replace Trident's four submarines when they become outdated, a plan the government estimated would cost between 15 billion and 20 billion pounds at 2006/2007 prices. Ending Britain's so-called continuous-at-sea-deterrence (CASD) -- having a nuclear-armed submarine at sea at all times -- would remove the need to replace all four submarines, while prolonging the life of existing ones, the Royal United Services Institute think-tank said in its May journal. SAVINGS "Only building two or three could reduce the cost of the programme by up to 6 billion (pounds, on current estimates)," RUSI said. "Ending CASD now would further extend the service life of the existing submarines well beyond 2024, with significant savings, estimated at over 5 billion." Cameron told reporters on Thursday such a move was out of the question. "The short answer to that is no ... If it wasn't continuous at sea it wouldn't be a proper deterrent," he said. RUSI argues that the nuclear threat against Britain is low, and that the likelihood of a nuclear attack by Russia, which it says is the only country able to deliver a nuclear first strike against Britain, was "near zero." The think-tank also says reduced, but more varied, submarine patrols at times of tension would create uncertainty in the mind of the enemy, and that Britain's NATO allies were also a deterrent to attackers, reducing the need for CASD. The UK defence budget totals about 50 billion pounds in the 2010/2011 fiscal year. Defence minister Liam Fox told Reuters last month a planned strategic defence review (SDR), scheduled to take six months, would be "unsentimental." "Alongside the Strategic Defence and Security Review, we will undertake a fundamental review of the way we provide defence capability in the UK, including reshaping the structure of the Ministry of Defence and defence acquisition. It is through this process that we will achieve a 25 percent reduction in running costs...," a ministry spokeswoman said. Steve Jary, a spokesman for a union representing Ministry of Defence (MoD) workers, condemned the planned cost cut. "The government has put the cart before the horse. What possible advantage is there to making swingeing cuts to MoD running costs before the SDR has even begun? ... The danger is that the UK's defence capability will be hamstrung as a result."