"During the concept phase of CR2 Life Extension Project (LEP) all options, from do nothing to buying a new tank, have been considered. As it stands, the manufacture and costs of a new main battle tank make it unlikely that the Army would seek this option. CR2 will be taken forward and the LEP is scheduled to enter the assessment phase in early 2016," an MoD spokesman said.
The admission that a new tank was probably beyond the reach of the Army follows a recent media report that said the Army was considering such a move.
Industry responded to an LEP request for information from the MoD last year and later followed that up with a rough order of magnitude on pricing.
Lockheed Martin UK, one of the contractors that responded to the request, said it expects a prequalification questionnaire to emerge next month.
British Army boss Gen. Sir Nick Carter, speaking at September's DSEI show, admitted the Challenger 2 is showing its age.
"We certainly have issues with the tank we have at the moment and we should be in no doubt that if we don't do something about it some of the obsolescence built into it will be challenging. How we deal with it is still in discussion," he said.
"In the light of world circumstances now, rather than 2010, the need for an upgrade of Challenger 2 becomes more important," he said.
Except for new vehicles rushed to British forces in Afghanistan to combat Taliban bombs, the past decade has largely failed to deliver what the British Army would have hoped for to build armored vehicle capabilities with several key programs falling by the wayside.
Many of those urgent operational requirement purchases have now been taken into the core equipment program.
Barry said it was an important program to give the British the sort of balanced force of tracked and wheeled armored vehicles the US, France and other respectable armies have.
"The MIV project is still in pre-concept and initial work is taking place scoping the approach to the project. Initial Gate [the concept phase] is anticipated in 2016," said the MoD spokesman.
"I am not convinced the MoD can fund its future armored vehicle aspirations. The SDSR will need to make some very hard decisions [on programs]," said one leading industrialist.
The MoD is set to spend £15.4 billion (US $23.4 billion) on land equipment up to 2024, although not all of that is on armored vehicles.
Data released recently under the Freedom of Information Act regarding land forces equipment spending to 2024 showed seven of the 18 programs covered in the largest A and B spending categories were armored vehicles.
Category A is for deals above £400 million and category B is for programs costing £100 million to £250 million.
Barry, though, said the issue with armored vehicle requirements isn't just money but the changing strategic situation the SDSR will have to address.
"The latest edition of the UK defense equipment plan was written to allow the armed services to implement the 2010 SDSR. The strategic situation has changed since then. Particularly relevant to the British Army is the French operation in Mali as a model of intervention that involved some armor, including wheeled vehicles, and more importantly the events around Russia and the Ukraine," he said.
"NATO's readiness action plan and the UK's commitment to send forces to train in Eastern Europe is all about deterrence. If you are going to deter Russian conventional forces you need credible land forces," Barry said.
The Army has been working to achieve some of its priority capability improvements.
Last September, General Dynamics UK signed a £3.5 billion deal with the MoD to deliver 589 Scout Specialist Vehicles between 2017 and 2024. The first of the most important version, a reconnaissance vehicle recently named Ajax by the Army, is scheduled for delivery starting in 2020.
Lockheed Martin UK is in a £642 million development phase of a program to update the Warrior infantry fighting vehicle with a new turret, 40mm cannon and other improvements.
The MoD was less clear about the timing for a production contract, suggesting there are still issues to be resolved.
"A decision to proceed to contract for manufacture will be made once the MoD is clear that the proposed solution provides confidence and value for money for this phase. It is anticipated that trials will commence in 2016 and an initial operating capability will be delivered in 2019," said the MoD spokesman.
Andrew Chuter is the United Kingdom correspondent for Defense News.