Cameron ordered the Treasury to forgive the Defense Ministry for exceeding its 2011-2012 budget by nearly $1 billion, sparing the military further cuts this year, The Daily Telegraph reported Friday.
Senior government officials said the conflict in Libya -- where rebels are fighting to overthrow strongman Moammar Gadhafi after four decades of rule -- also raised questions about the prudence of cuts that would reduce Britain's military capabilities for several years.
"The debate is live. The prime minister is very much part of it. There's a lot of objective thinking going on," a senior defense official said.
Nick Harvey, a defense minister, said operations in Libya and Afghanistan left the military "at full stretch," leaving that Britain struggle to cope should more military emergencies arise, the Telegraph said.
Cameron and his team reportedly were investigating whether the Strategic Defense and Security Review's cuts were too extreme and left Britain ill-equipped for current international security situations.
"The vision for 2020 is not bad but the question is, can we take the risk of the dip to get there?" the defense source asked. "The uncertain world we envisaged [at the end of the decade] is here now."