Britain's military helicopter fleet could face huge cuts as part of Ministry of Defence efforts to tackle a £37 billion financial black hole, it was reported yesterday.

Defence Ministers are studying options including scrapping the entire fleet of West-built Lynx Wildcats, it was claimed.

The reports came as Defence Secretary Liam Fox signalled numbers of senior military officers and civil servants would be reduced.

The North Somerset MP, just returned from a second Ministerial visit to Afghanistan, outlined his vision for the MoD's future in a speech in London.

He did not give specific details of the cuts being prepared for the Government's three-year spending review, which will be published in October.

But the Evening Standard claims to have seen a secret memo on how to achieve £3.96bn cuts – "flat-rate savings of 20 per cent" – across the rotary wing fleets operated by the Royal Navy, Army and RAF.

One option is said to be to axe the £1.7 billion fleet of 62 new Lynx Wildcats from AgustaWestland in Yeovil, as well as phasing out the Navy and RAF's Sea Kings, and the RAF's Puma helicopter.

Other scenarios see numbers of Chinooks and Apaches – other aircraft AgustaWestland have an interest in – and Merlins reduced, while one proposal includes 21 Wildcats.

The MoD said: "The future configuration of our Armed Forces will be based on the findings of the Strategic Defence and Security Review which is under way.

"Until the review concludes, speculation about its conclusion is entirely unfounded."

The issue is highly politically sensitive for the coalition Government, especially Dr Fox and Armed Forces Minister Nick Harvey, North Devon MP.

In opposition they constantly attacked the Labour Government, claiming it was putting the lives of troops in Afghanistan at risk by failing to provide enough helicopters.

And Lib Dem Yeovil MP David Laws, initially in charge of the cuts as Chief Treasury Secretary until his resignation, is one of Westland's strongest supporters.

Dr Fox admitted the process of reducing cuts would "not be painless".

There would not be equal changes across the system, as some parts of the Armed Forces worked better than others, he said.

He promised the MoD would be leaner and less centralised, and said his Afghanistan visit had reminded him supporting British forces on the frontline must take priority over spending on staff in Whitehall.

Dr Fox said the "ghastly truth" was Labour's financial mismanagement had left the MoD with an "unfunded liability" of £37 billion over the next decade.

He ruled out any merger of the Royal Navy, Army and RAF, but they can all expect to see cuts to personnel numbers and equipment projects.

And he stressed the top brass will not escape the cuts, adding: "We cannot demand efficiency from the lower ranks while exempting those at the top."

Reports have suggested the West-based Royal Marines could be brought under the Army's control, one of the Navy's two new aircraft carriers will be axed, and the Army may lose one of its brigades in Germany.

The defence review is not looking at whether to replace the Trident nuclear weapons system, a Government commitment, but Dr Fox is arguing with the Treasury over the £20 billion cost.

Chancellor George Osborne wants the money to come from the defence budget, and Dr Fox said yesterday this was "a conversation that is constantly ongoing with the Treasury".

Shadow defence secretary Bob Ainsworth said: "Today we had more unanswered questions from Liam Fox.

"He still can't tell us how our nuclear deterrent will be paid for – but maybe that's unsurprising as George Osborne seems to be calling all the shots."

The MoD also announced yesterday that two British soldiers serving in Afghanistan have died in separate incidents, bringing the death toll in the campaign to 330.

The first serviceman, from 1st Battalion The Mercian Regiment, was injured in a helicopter incident at a patrol base in the Nahr-e Saraj district of Helmand province on Tuesday.

He was flown back to Queen Elizabeth Hospital, Birmingham, where he died on Thursday surrounded by his family.

The second soldier, from 21 Engineer Regiment, died yesterday after being shot in the Sangin District of Helmand. His next of kin have been informed.