Downing Street has given an agreement in principle to the Pentagon to station interceptor missiles at RAF Fylingdales, North Yorkshire.
The confidential deal goes far beyond the official position that Britain is providing enhanced radar provision for the US national missile defence programme.
News of the deepening collaboration over the missile defence programme comes as the Prime Minister considers an American request to send British troops to the US-controlled sector of Iraq.
There was growing anger last night that UK soldiers stationed in Iraq might be put in even greater danger than they are already just to assist a pre-election offensive ordered by the Bush administration.
The siting of the interceptors on British soil would represent the most significant new military US presence in this country since the withdrawal of cruise missiles 13 years ago.
If re-elected, President Bush has pledged to spend around $10bn (£5.5bn) a year on realising Ronald Reagan's dream of erecting a missile shield to protect the West from long-range attack.
Sixteen interceptor missiles are being positioned in bases in Alaska and California this year. The intended location of the remaining 24 is a closely guarded secret, although it is known that the Pentagon wants to site some in Europe.
Mr Blair and Geoff Hoon, the Secretary of State for Defence, refuse to be drawn on how far Britain is prepared to co-operate in the programme, insisting that the US has made no formal request to site missiles here.
This newspaper has learnt, however, that an offer to site missiles in Yorkshire was made in a meeting in Washington in May this year and that preparations are well under way to overcome public and parliamentary opposition.
The meeting, one of a series held to discuss US-UK collaboration on the programme, was attended by senior officials from the British embassy, a deputy to John Bolton, the Pentagon's secretary for arms control, and staff from the US State Department.
British diplomats gave an agreement "in principle" to siting interceptors at RAF Fylingdales, but asked that no formal request be made until after the next general election.
Ministers are confident they can win public support for the missiles. They will insist that Britain has ensured the US respects two "red lines": that the system must be strictly defensive and that it must cost the British taxpayer nothing.
Mr Blair intends to argue that Britain has been given an extra line of defence from nuclear attack at no extra cost.
He will also point out that Britain is not alone in offering to site the interceptors. A number of Eastern European countries have indicated willingness, with Poland considered the leading contender.
A Ministry of Defence spokesman said: "The UK has not yet decided whether we need our own missile defence. This is a decision for the future when the US system has further evolved."
The prospect of a confidential agreement on missile defence between Mr Blair and Mr Bush has appalled opposition and Labour MPs.
Sir Menzies Campbell, foreign affairs spokesman for the Liberal Democrats, said: "These reports, if true, are a source of grave concern given that a decision appears to have been taken behind closed doors before a full public debate on the costs and strategic implications.
"This could have major implications for the defence posture of the UK, our relationship with Nato countries and other allies, and the strategic balance of nuclear weapons around the world."
Sir Menzies also expressed concern that a formal agreement between Britain and the US on "co-operation, development, test and evaluation activities related to missile defence" has not been released.
Mr Hoon said he would be placing a copy in the Commons library on Tuesday. There was no sign of it as of Friday afternoon, however.
"In view of the potential significance of these events it's extraordinary that MPs don't yet have access to this agreement," Sir Menzies said.
Malcolm Savidge, MP for Aberdeen North and a leading opponent of missile defence, said it would lead to a revolt among Labour backbenchers. "This is part of an increasing surrender of British interests to satisfy the obsessions of the Bush administration."
Critics of ballistic missile defence argue that it will lead to a new arms race as nuclear-armed states build faster, more powerful missiles to evade the defensive systems.
17 October 2004 09:16
Francis Elliott and Severin Carrell