* Britain risks capability gaps after military review
* Review not weakening NATO, but military may face more cuts
By Mohammed Abbas and Rhys Jones
LONDON, Oct 22 (Reuters) - A major review of British defence strategy has shrunk military capacity and left the armed forces vulnerable to further cuts, with much hinging on how long British troops remain in Afghanistan.
At eight percent, the defence budget cuts are far below an average of 19 percent forced on other departments to reduce a record budget deficit, allaying U.S. and NATO fears and keeping Britain as one of the strongest military powers in Europe.
Tuesday's Strategic Defence and Security Review, the first since 1998, highlighted cyber attacks and terrorism as the greatest threats to British security, justifying cuts to hardware used in conventional warfare.
But a crisis could leave Britain exposed if some of the capabilities it has scaled back are needed again, not least the ability to fly jets from aircraft carriers, a decisive factor in Britain's 1982 war with Argentina over the Falkland Islands.
Contractual obligations meant the government had to retain two previously ordered carriers, but Britain will not have combat jets to fly from them for some 10 years.
"It's clear that the government is prepared to take significant risk in some areas ... It's whether in the risks they take, they get caught," said Andrew Dorman, a senior lecturer at King's College London's defence department.
Britain is also hoping it will not have to project significant military power abroad again in the near future, given that it has scaled back its fleet of warships and planes and will commit fewer troops to foreign military interventions.
Britain's role in Afghanistan, where it has 9,500 troops and from which it plans to withdraw by 2015, weighed heavily on the review, and limited cuts to the army and some equipment.
"In important respects, this is a holding review while we're in Afghanistan," said Malcolm Chalmers, a professor at the Royal United Services Institute thinktank.
"If the UK was able to make a massive drawdown of its forces by 2013, there would be pressure to have a significant review of commitments before 2015," he added.
MORE CUTS?
The review envisaged a reduction of about eight percent in real terms to a defence budget of 36.9 billion pound ($58 billion), but it lacked detail on where the axe would fall.
"I think you're going to see a whole series of announcements over the next 18 months which will involve some big decisions. If some of the efficiency savings aren't made, or they need further ones, I see big potential cuts to follow," Dorman said.
The question of whether to renew Britain's Trident nuclear deterrent was postponed, and the prospect of scaling it back left dangling. A decision on how many Joint Strike Fighter and Eurofighter combat jets to buy was also put off, as was the number of armoured vehicles to be bought in a new programme.
More may become clear when the government consults with industry to decide a new military industrial strategy by the end of the year. The strategy will give a clearer picture of what the defence ministry will buy in future, and what it will scrap.
POLITICS AND POSITION
Contrary to earlier fears, the review has not seen Britain slip significantly from its place as one of the most capable military powers in Europe, roughly on a par with France.
"Based on what we have seen the UK will still be highly capable across the spectrum and remains committed to an active international engagement," said NATO spokesman James Appathurai.
Politically, the right-leaning Conservative Party, which flaunts its pro-military credentials, has emerged looking like a champion of the armed forces, going softer on the defence budget than that of other government departments.
The dovish Liberal Democrats, the Conservatives' junior partner in government, will be pleased at the decision to delay the renewal of Trident, because it wants an alternative system.
But the party's failure to keep its promise to prevent a rise in university tuition fees contrasts with the Conservatives' success in protecting its military backers.
"The Conservatives are making the big calls in the coalition, pushing their agenda, minimising defence cuts while fundamentally changing the system of university finance," said Jonathan Tonge, head of politics at Liverpool University.
"What looked at least initially as a decent (coalition) deal for the Liberal Democrats is already beginning to unravel as the policy agenda of the Conservatives is played out." (Additional reporting by David Brunnstrom in Brussels and Tim Hepher in Paris, editing by Philippa Fletcher)