Ministers have rubbished claims that publication of a report into defence procurement has been delayed because it was too critical.

Defence ministers were reacting to the anonymous claims of a Ministry of Defence (MOD) official, made to Channel 4 News last night, that Number 10 had "panicked" because the review talked of £2.5bn a year being wasted on delayed projects.

The review was commissioned by former defence secretary John Hutton and is being carried out by Bernard Gray, the former journalist turned business executive who led the 1998 Strategic Defence Review.

Defence minister Kevan Jones told the news programme that he did not recognise the £2.5bn figure and, while admitting that procurement could be done better, denied suggestions of incompetence.

Lord Drayson, the minister for strategic defence acquisition reform, insisted that the review had been commissioned precisely because "we want to ensure that we are buying equipment as efficiently as possible".

He added: "Bernard’s report is currently in draft format and I am working hard with him on the issues he has identified. The work will feed into our recently announced Green Paper on defence. We are constantly improving the procurement process which has seen us deliver £10bn of equipment to the frontline over the last three years."

Shadow defence minister Fox has expressed scepticism about the government's motives and said that, "by trying to suppress this report, the prime minister has demonstrated that he cares more about the reputation of Labour than he does about the wellbeing of the armed forces.

"The government has a moral duty to ensure that our armed forces have the equipment they need for the warfighting they are asked to do; instead we have a catalogue of bureaucracy, incompetence and timewasting."

He described "12 years of incompetence" under Labour, but defence minister Quentin Davies said the worst cases of cost and time overruns "go back to the '90s, to the last Conservative government, things like Nimrod and Chinook Mark 3".