The Government has cut New Zealand loose in defence terms in rejecting Derek Quigley's advice to go ahead with the contract for some F-16s, Opposition Leader Jenny Shipley said today.

"It has made a short-sighted decision that will affect New Zealand's defence capability for a generation to come.

"There hasn't been a shred of public debate about this decision which, as Derek Quigley warned, was far too important to be taken in such an off-hand manner.

"The Government has the right to set its own defence priorities - despite Quigley's finding that the F-16s were a good deal. But it shouldn't set priorities in a vacuum.

"It has made a far-reaching decision in the absence of a proper review and without any clear word on the future, if any, of New Zealand's air strike capability.

"All we are left with after today is the prospect of the old A4 Skyhawks continuing in service for "some years to come."

"Then what?" Mrs Shipley asked. "Derek Quigley told the Government in no uncertain terms that cancellation would either mean far more expensive replacement costs in the future or an end to our air strike capability.

"As Quigley has said, this is a 'cart before the horse' decision.

Helen Clark has got to spell out which of those alternatives she wants.

"If the Labour-Alliance minority Government is committing New Zealand to a future without an air strike capability, then it should be telling us so.

"New Zealand has a proud history of contributing to regional strategic and defence actions to help ensure regional stability and secure trading routes. We also have a long record of contributing to peace-making and peace-keeping roles, as we demonstrated with our commitment to East Timor. We could not have sent troops in had 2we not had air cover available.

"We also require air strike capability to contribute to our regional security commitment and to provide balance in protecting our economic interests.

"As recently as 1997 the National-New Zealand First coalition recommitted New Zealand to a balanced defence force. We put a capital budget in place that would see the maintenance and upgrading of those capabilities.

"In each subsequent Budget we have made the appropriate allocation required and flagged any fiscal risks associated with this plan. The Government's claim of a financial shock in the defence Budget is pure politicking to justify its isolationism.

"The Government has left New Zealanders - and our friends and allies - with a vacuum rather than a defence policy," Mrs Shipley said.

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