Britain and France agreed on Tuesday to set up a joint military force and share equipment and nuclear missile research centres in what Prime Minister David Cameron hailed as a new chapter in their relations.
Treaties signed by French President Nicolas Sarkozy and Cameron in London will pave the way for an unprecedented degree of military cooperation between the two neighbours, western Europe's biggest defence spenders.
The NATO allies, and Europe's only nuclear powers, have a centuries-old history of military rivalry and, more recently, have differed sharply over issues such as the Iraq war.
Their new partnership is driven by the desire to maintain cutting-edge military capabilities while at the same time reducing defence spending to rein in big budget deficits.
France and Britain agreed to set up a joint brigade-sized army contingent with air and sea support, which could assemble as needed to take part in NATO, European Union, United Nations or bilateral operations.
"If we come together, and work together we can increase not just our joint capacity but crucially we can also increase our own individual sovereign capacity to make sure we are able to do more things alone, as well as together," Cameron said.
Cameron's government announced two weeks ago it was cutting Britain's 37 billion pound ($59.4 billion) defence budget by 8 percent in real terms over the next four years to help rein in a record peacetime budget deficit.
France's aircraft carrier Charles de Gaulle and a British carrier that is being built will be made compatible so that each country could fly its planes off the other's ship.
The ultimate aim is for the two countries to coordinate so that one carrier is at sea at all times.
The two countries agreed to share nuclear warhead research and simulation centres. With nuclear missile tests banned, sophisticated laboratories permit both countries to test the safety of their warheads.
London and Paris were negotiating with Airbus to maintain their future fleet of A400M military transport planes.
"Today, we open a new chapter in a long history of cooperation on defence and security between Britain and France," Cameron
Cameron said he expected Washington to welcome the agreement for two of its allies to work more closely together.
"They (the Americans) want European countries like France and Britain to come together and share defence resources so actually we have greater capabilities.
"Often it is the case that the Americans and other NATO partners would be acting together and they would like us obviously to have the biggest bang for our buck we possibly can.