The acting continues, but the pretence is over. It is expected that, in the next few months, Tony Blair will announce that the British government will fork out tens of billions of pounds for a new generation of British nuclear weapons to replace the ageing Trident D5 missiles and our four Vanguard Class submarines. The outcry from vocal sections of the public has already been discounted in Whitehall. The deed, I am told, is done. But you will not find any-one prepared to admit it.

So far, the only public pronouncement has been Labour's 2005 election manifesto, which declares delphically: "We are committed to retaining the independent nuclear deterrent and we will continue to work, both bilaterally and through the UN, to urge states not yet party to non-proliferation treaties . . . to join."

This is one of those rare issues where Tony Blair and Gordon Brown see eye to eye. As if stalked by the spectre of Aneurin Bevan going naked to the negotiating table, both Prime Minister-present and Prime Minister-future have allowed themselves to be convinced that, if Britain is to continue to have global ambitions, it has to have a credible nuclear weapon. Failure to replace Trident would leave the perfidious French as the only fully functioning nuclear performer in western Europe - the Russians with their rusting arsenal seem to count only as a bargain-basement warehouse for would-be terrorists. "If Britain stops now, it leaves France as the only serious European nuclear power," says a former defence chief. "In present circumstances, no prime minister would contemplate that."

While the row in the country, party and parliament will be over whether a medium-sized country such as the UK should have a nuclear weapon at all, the argument within the government is about the choice and cost. The current Trident system cost £12.6bn to introduce at 1996 prices, and requires £280m a year to maintain. The options for upgrading range from £5bn (for replacing the missiles alone) to between £20 and £30bn for a new suite at the weapons research centre at Aldermaston, along with new submarines and base facilities.

Faced with such a daunting bill, the RAF has proposed its own cheap and cheerful solution: of fitting nuclear warheads on stand-off missiles carried by the new Typhoon fighter-bomber. This idea has been floated by the Chief of the Air Staff, Sir Jock Stirrup, who takes over next year as overall defence chief. The problem with the nuke-lite option, according to some at the Ministry of Defence, is that this removes the advantage of surprise. "Any missile being loaded on a plane at any British base, such as Fairford, will be seen by outsiders," says one RAF strategic planner. In other words, only a submarine can offer what the top brass are looking for. In surveillance jargon, the oceans are "electronically opaque" - no electronic device can track a sub at distance. This is the argument that is tilting the choice in favour of updating the D5 Trident missile while refitting, and if necessary replacing, the Vanguard submarines after 2020.

This provides a financial headache for the Chancellor, a man notoriously tough on defence, to which his department now feels a cultural antipathy. The defence budget is at breaking point, yet again, and the need to gear up for a new nuclear programme will pile on further agony. With the bill for Iraq estimated to have exceeded £4bn and an extra £0.5bn required for operations in Afghanistan, most sources on the spending side at the MoD say that existing programmes and operations will have to be cut once more.

Last year the Treasury forced the MoD to carry out an unpublicised defence review, leading to cuts in army regiments and the slashing of the navy and air force. The same appears to be happening this year, and it is thought that at least two major programmes are due to be towed off and forgotten, rather like the Fighting Temeraire in Turner's painting. The two favourites for this treatment are the plans to build two major aircraft carriers for the navy by 2015, and the project for new expeditionary equipment for the army, known as the Future Rapid Effects System, costed at roughly £6.5bn. At the same time, there seems to be no taste for cutting the number of UK forces operations and commitments to Afghanistan, Iraq and the Balkans - and there now seems every chance that British troops will be committed one way and another to Darfur. Still, money will be found. Defence experts suggest that most probably the government will create a new contingencies fund, keeping the money out of year-on-year defence budgets.

With five wars under his belt, Blair has taken to his role as a latter-day Palmerston. He sees the furore over Iraq as an unfortunate, but perhaps unavoidable, cross to bear. Trident is a talismanic issue for him and for his detractors. Dropping Labour's opposition to Trident in the mid-1990s was, in his eyes, a rite of passage for a respectable political party. When the technical papers on the options and feasibility for updating and replacing Trident are circulated round Whitehall in a few weeks' time, interested parties will be invited to the Great Nuclear Debate, in No 10's best Richard and Judy mode. Blair will give a good impression of listening - as he will do (albeit more impatiently) when his party gets the chance to talk about the matter during the autumn conference season. In any case, by then it will be too late. It always was.

The answer to the riddle can be found in the 1998 Strategic Defence Review. Paragraph 60 states: "Progress on arms control is . . . an important objective of foreign and defence policy. Nevertheless, while large nuclear arsenals and risks of proliferation remain, our minimum deterrent remains a necessary element of our security." Paragraph 62 goes on: "With the withdrawal of the last RAF WE177 bombs . . . Trident is our only nuclear weapon. We need to ensure that it can remain an effective deterrent for up to 30 years." That would take us to the year 2028.

The post-9/11 world has merely confirmed Blair in his view of him and George W Bush standing shoulder to shoulder, with all available weaponry at the ready. The British military is egging the Prime Minister on, telling him that the prospect of terrorist groups being able to make "dirty" nuclear bombs leaves the UK more reliant than ever on its own nuclear deterrent. With his eye on the future, Brown has been similarly persuaded. "It's a no-brainer," a senior general told me recently. "We have to go on." The odd dissident takes a different view, such as the former guru of Britain's cold war nuclear theology and former permanent under-secretary at the MoD Sir Michael Quinlan. He has argued vociferously that nuclear weapons will do nothing to deter a terrorist bent on destruction. In Whitehall, such voices are now whistling in the wind.

There is another, possibly more important issue at stake. There is a school of thought among government lawyers that Trident's renewal could violate the Nuclear Non-Proliferation Treaty, of which Britain was a founder signatory in 1968 - in particular Article VI, by which members pledge to eradicate nuclear weapons, their own included. Here Blair, as ever, will follow the lead of the Bush administration. It has constructed the following argument: Britain and the United States are negotiating in good faith, and it is only possible to negotiate from a position of strength. To remain armed to the teeth is vital in such an uncertain world. The old doctrine of containment is being eroded. The old treaties are interpreted to suit the moment.

As for the money, it will be found somehow. Such is the lead time for projects such as this, that work will have to start soon. Already Aldermaston has been recruiting scientists to design warheads. At Faslane, where the submarines are based, the "situations vacant" columns are not filling up. The jobs are secure.

On 4 July, protesters will attempt to converge on Faslane as part of the G8 protests. They will be going through the motions. The die is cast.