The cost to the taxpayer of the two military operations in Iraq and Afghanistan has nearly doubled in a year to more than £3 billion, the Commons Defence Committee has revealed.

The rising bill for new urgently-required equipment, depreciation costs of armoured vehicles and other over-used military kit and the award of a £2,500 operational bonus for all the troops have contributed to the unprecedented increase.

The MPs on the committee said that even though troop numbers were supposed to be coming down in Iraq, the financial burden is still high.

In 2006/2007, the cost of the Iraq operation was £956 million, but the forecast for 2007/2008 is more than £1.6 billion, an increase of 72 per cent.

For the campaign in Afghanistan where troop numbers have risen sharply since 2006, the cost in 2006/2007 was £742 million and the forecast for 2007/2008 is also more than £1.6 billion, a rise of 122 per cent.

The MPs said: “These are clearly very significant increases, not least with regard to operations in Iraq. While we are aware that the drawdown of forces in Iraq will not immediately lead to a comparable decline in costs, nonetheless, the magnitude of the increase in costs estimate there is surprising.”

The MPs said that the increased costs appear to have been “unforeseen”.

Part of the reason for the jump in costs is that the Ministry of Defence now has to put a value on the depreciation of all the equipment that has been used in the two campaigns.

The Treasury has demanded that the MoD should reflect the accountancy rules adopted by business and industry when assessing its annual financial costs.

With equipment such as armoured Land Rovers and other forms of armoured transport being used on rough terrains and in hostile environments, the depreciation has been significant.

James Arbuthnot, chairman of the Commons Defence Committee, said: “Few people will object to the investment being made in better facilities and equipment for our troops in Iraq and Afghanistan. However, this estimate represents a lot of public money. The MoD needs to provide better information about what it is all being spent on.”

Nick Harvey, Liberal Democrat defence spokesman, said: “This clearly shows how the Iraq war is continuing to bleed our finances dry, leaving soldiers in Afghanistan overstretched and under-equipped.”

“If the Government, supported by the Conservatives, had not been so keen to suport the illegal war in Iraq, the Afghanistan operation could have been much better resourced,” he said.

The Defence Committee report said that the MoD had originally estimated that Iraq would cost £955 million in 2007/2008 and Afghanistan, £964 million.

But the latest estimate was that each operation would now cost more than £1.4 billion, an increase of around 50 per cent for both theatres and a total annual bill of nearly £2.9 billion.

However, when the indirect costs of depreciation were included, the overall bill for the two campaigns for 2007/2008 had jumped by the equivalent of 94 per cent to nearly £3.3 billion.

The MPs said: “We expect the MoD to provide us with a full explanation for the very significant increase in the indirect resource cost of operations.”

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