John Healey has quit as defence secretary amid a battle within government over funding for a long-delayed military spending plan.
He said a proposed settlement for the defence investment plan (DIP) "falls well short of what is required for defence and the country at this dangerous time".
And in a scathing resignation letter, he said the prime minister had been "unable" and the Treasury "unwilling" to "commit the resources that the nation needs to defend the country at this time of rising threats".
In response, Sir Keir Starmer said the plan would deliver "an unprecedented increase in defence spending" in a "sustainable and fair" way, without relying on "irresponsible borrowing".
The shock resignation of one of Sir Keir's most loyal cabinet allies has stunned the government, and further weakened a prime minister whose long-term future in Downing Street was already in doubt.
It also comes days before a crucial by-election at which Labour candidate Andy Burnham is seeking a return to Westminster to enable him to challenge Sir Keir for the premiership.
Healey is the second cabinet minister to resign from Sir Keir's government in recent weeks, after Wes Streeting quit as health secretary having "lost confidence" in the PM's leadership.
Sir Keir has faced calls to resign within his own party following a poor set of election results in England, Scotland and Wales last month, although he has told supporters he will stand in any Labour leadership contest.
Internal wrangling over defence spending has been rumbling on for months following multiple delays to the DIP, which was originally due last autumn.
But the issue has come to a head in the run-up to a summit of the Nato military alliance in Turkey next month, which the prime minister had set as a public deadline to announce the blueprint.
Healey said demands on defence had increased since January due to the conflict in the Middle East and new UK commitments in the Arctic and Ukraine.
Reports have suggested the government was preparing to announce a £13.5bn funding increase for the Ministry of Defence (MoD) over the next four years, less than the extra £28bn requested by the department.
In his letter, Healey expressed concern that the DIP financial settlement, which he received on Monday, was "backloaded" when the "pressure of operations and imperative to speed up readiness to fight is in the first two years".
But in a letter responding to Healey, Sir Keir insisted the DIP would provide "the resources our military needs to keep us safe and the clarity the British defence industry needs to plan".
"The increases in spending that underpin this plan will be sustainable and fair," Sir Keir said. "They will mean significant reallocations of funding from across government departments and the right choices to protect our nation."
He added: "Irresponsible borrowing only puts that at risk. Taking these decisions is never easy."
The government has committed to spending 3.5% of gross domestic product (GDP) – a measure of the size of the economy – on defence by 2035, but is yet to spell out how it will pay for this commitment.
The details of the cuts have not been confirmed, but reports suggest Sir Keir is asking all government departments to trim their capital budgets by 1% to raise £6bn towards defence.
Healey said the UK should be spending 3% by an earlier 2030 timetable, but warned the plan he was presented with this week moved too slowly.
He said Sir Keir had spelled out the threats to the UK last week, including that there could be an attack by Russia on Nato as soon as 2030.
Healey told the PM he was "being forced to make decisions that would reduce the readiness of our forces", and he was left with "no other option" than to quit.
Last year's Strategic Defence Review (SDR) outlined a shift towards "warfighting readiness" to deter threats and pledged billions in extra spending for extra ammunition, next-generation fast jets, drones, and new attack submarines.
Healey has warned for several months about the need to find additional investment to meet what he saw as rising demands on the armed forces.
Conservative shadow defence secretary James Cartlidge said Healey had been "left with no choice" after the prime minister offered him "such a tiny amount of money".
Reform UK deputy leader Richard Tice said Healey's resignation "exposed the prime minister's true priorities". "In effect, he has acknowledged that Keir Starmer is leaving the British people less safe," he added.
Kevin Craven, chief executive of defence trade association ADS, said Healey's resignation was "truly a damning reflection on the current state of affairs", adding that "national security and defence of the realm is not an accountant's job".
