Nine brand new Nimrod surveillance aircraft, which cost taxpayers £3.6 billion, will be dismantled and scrapped without ever having flown.
The MRA4 planes, only one of which has ever left the ground, will be stripped of their equipment and abandoned following Coalition defence cuts.
The decision led to the Nimrods being branded “the world's most expensive pile of scrap metal".
Hundreds of jobs could also be lost, according to BAE Systems, which built the Nimrods.
The Strategic Defence and Security Review in October terminated the £3.6 billion order for new Nimrod MRA4 maritime patrol aircraft.
Other aircraft retired in the defence review – including Harrier jump jets – could be sold intact to foreign countries to recoup some money.
But the MoD has decided that simply scrapping the new Nimrods is the “most cost effective option”.
BAE on Thursday said it had received a formal “contract termination” notice from the MoD, and halted work on the Nimrods at Woodford, Cheshire.
Nimrods, which fly from RAF Kinloss in Scotland, are equipped with long-range surveillance equipment for eavesdropping on communications and detecting movement.
The aircraft can provide vital support for Vanguard submarines carrying Trident nuclear missiles, by detecting Russian hunter-killer subs trying to follow them. Without the Nimrods, Britain is likely to ask the US and France to provide such anti-submarine warfare capabilities in future.
Admiral Sir Mark Stanhope, the head of the Royal Navy has said he is “very uncomfortable” about the situation.
The “disposal” of the new Nimrods was confirmed in a letter from Peter Luff, the defence procurement minister, to Angus Robertson, the Scottish National Party MP who represents Kinloss.
The minister said: “I have considered a range of option for the disposal of the Nimrod MRA4 fleet and concluded that the most cost effective option is for the nine aircraft to be disposed of, following recovery of equipment and systems that can be used elsewhere.
“We estimate that around £2 billion will be saved over the next 10 years by not bringing the aircraft into service.”
BAE confirmed that its staff at Woodford have begun removing electronics and other systems from the Nimrods as a preparation for the MoD’s final disposal of the empty airframes.
Mr Robertson said: “The scrapping of the Nimrod fleet is total folly and a record breaking waste of taxpayer money. Not only are billions of pounds being wasted but there is now a massive military capability gap. These capable aircraft could and should be in service not being cut up for scrap.”
Bernie Hamilton of the Unite trade union, which represents workers at BAE’s Woodford site, said that “The airframes will either be parked and left to rust, or they will be cut up and sold for scrap. It’s a substantial waste of UK taxpayers’ money.”