Theresa May has insisted Britain will remain a “leading defence nation” amid reports she had questioned the level of military capability the country needs.

Following talks in Downing Street with Nato Secretary General Jens Stoltenberg, the Prime Minister said the UK would maintain a range of capabilities – including conventional, cyber and nuclear.

She said a report suggesting she had challenged Defence Secretary Gavin Williamson to justify the country’s status as a “tier one” military power was “not correct”.

The Financial Times reported Mrs May had sent “shockwaves” through the Ministry of Defence after telling Mr Williamson he needed to rethink which capabilities the UK needed for a modern military force.

Speaking at joint news conference with Mr Stoltenberg, Mrs May said: “The United Kingdom is a leading member of the Nato alliance. We are a leading defence nation and that will continue.

“We are the second biggest defence budget in Nato. We are the biggest defence budget in Europe.

“The reports that you have read are not correct. We will continue to be that leading contributor to the alliance but also a leading defence nation. We will continue to spend 2% of our GDP on defence.

“We will continue to contribute in a whole variety of ways across conventional, cyber and nuclear capabilities.”

Mr Stoltenberg said it was important to the whole alliance that the UK continued to play a leading role, providing “high-end, first-class capabilities”.

“The Prime Minister reassured me that the UK will continue to deliver high-end capabilities – a wide spectrum of capabilities,” he told a joint news conference in No 10.

Mr Stoltenberg was in London for talks ahead of the Nato summit next month in Brussels amid fears of another diplomatic bust-up between US President Donald Trump and the European allies following the bruising G7 meeting in Quebec.

In a speech at Lancaster House, Mr Stoltenberg acknowledged there were “real differences” on trade, the environment and the Iran nuclear deal.

But he insisted the allies had overcome such disagreements before and that it was “in our interests to stand together”.

He added: “When it comes to Nato, security and defence, the transatlantic bond is not weakening it is actually strengthening.”

He suggested that, despite Mr Trump’s outspoken comments demanding the Europeans contribute more to the costs of collective defence, the US was showing its commitment through its deeds.

“Actions speak louder than words,” he said.

He sought to play down reports that Mr Trump was preparing to meet Russian President Vladimir Putin during his visit to Europe in a move likely to be seen as another blow to Western unity.

But Mr Stoltenberg said such a meeting would not “in any way” contradict Nato policies and insisted dialogue was not weakness.