UK foreign secretary David Lammy has said that a new multilateral fund will be needed to secure Europe’s defence as he confirmed that Britain is “open to” joint financing of military spending.

Lammy welcomed moves this week by the EU to look at raising significant sums of money for defence across the continent, and threw his support behind the creation of an institution or system that would include Britain.

“We’ll need more multilateral mechanisms in this area,” he told the Financial Times during a trip to Japan. “We in the UK are open to those initiatives because this is about European security.”

Several proposals that would include Britain have been put forward in recent weeks, including a Europe-wide rearmament bank and an institution that would include democracies such as Japan, South Korea and Australia alongside Europe.

The UK foreign secretary declined to endorse a particular approach, signalling that he wanted to see more details. His comments come as Ukraine faces increasing pressure from US President Donald Trump, who this week cut off military and intelligence aid to Kyiv. Trump has also aggressively pushed Europe to re-arm and fund its own defence.

During a virtual meeting on Friday between EU leaders and non-EU Nato members, including UK Prime Minister Sir Keir Starmer and Norway’s Prime Minister Jonas Gahr Støre, the topic of “how they can participate in efforts to boost [the] European defence industry” was discussed, according to people briefed on the call.

Relations between the US and Ukraine, once staunch allies, have unravelled since Trump and President Volodymyr Zelenskyy’s clash at the White House last week, a moment Lammy described as “not a high point in diplomacy”.

“In hindsight, what should have been a private discussion became a public discussion” between the two leaders and US vice-president JD Vance, said Lammy. The foreign secretary said that frontline politics was “tiring” and “relentless”, adding: “It’s no more relentless than for someone who’s leading a country at war and so it’s not for me to judge, but it is for me to act and to heal”.

Starmer has been at pains to “broker a healing of that rift”, said Lammy.

“It’s been really good this week to see Zelenskyy commit to a minerals deal, to express regret about what happened at the White House, to come forward with a plan for a partial ceasefire that I think has gone down well in the White House, and to see . . . Donald Trump recognising that change in tone,” added Lammy.

Trump’s return to the Oval Office in January and Washington’s shift in policy on Ukraine have ushered in a “new era” in geopolitics, said Lammy, but he insisted: “I don’t recognise those that talk about the collapse of the west.”

He is adamant there is no question of the UK or Europe “selling Ukraine short” by allowing Kyiv to be forced into a bad peace deal with Russia. The UK and France are pushing for a European peacekeeping force, backed by the US, to secure peace in Ukraine.

Pressed on whether a US-Ukraine agreement on rare earth minerals alone would be a sufficient “backstop” from Trump for a European peacekeeping force, Lammy said such a deal would be significant because the “US takes protecting its own [economic] interests very, very seriously”, but argued it would be unwise to be more definitive.

While discussions were continuing about the security guarantees that might be offered to Ukraine, “we have to be very careful that we’re not aerating that so publicly that we’re actually giving [Russian President Vladimir] Putin a leg up in these negotiations”, he said.

Asked whether the UK was contingency planning for the possibility of the US pulling back its military resources from Europe in future, given the administration’s recent unpredictability, Lammy said: “You would expect the Foreign Office to plan for all scenarios that inevitably mean a greater commitment [to defence] from Europe.”

Lammy has travelled to Tokyo this week with UK business secretary Jonathan Reynolds for a “2+2” economic dialogue with their Japanese counterparts. Sipping green tea in front of panoramic views on the 51st floor of a skyscraper overlooking the bay, he said the UK and Japan “share a powerful commitment to the rules-based order, both of us are important G7 allies and we have a determination to work together”.

Last week, the UK foreign secretary saw his department’s aid budget slashed from 0.5 per cent of gross national income to 0.3 per cent, a reduction that will be phased in over the next two years to fund an uplift in defence spending from 2.3 per cent of GDP to 2.5 per cent by 2027.

He insisted he did not accept any suggestion the aid cut could lead to the death of hundreds, or thousands, of people in the developing world, arguing that “investing in deterrence saves lives”.

A 2023 Whitehall assessment of cuts to the UK aid budget under the Tories, from 0.7 per cent of GNI to 0.5 per cent, found that the move would result in thousands more women dying in pregnancy and childbirth in Africa.

Lammy insisted those spending reductions were “very different” from what Starmer had just announced, adding that the Conservative administration abolished the Department for International Development “overnight” and created “huge cliff edges” in funding for its aid projects.

He is eager to invert the current structure of his department, where two-thirds of staff are based in London and a third are overseas. Artificial intelligence should help cut bureaucracy, he said, and was also being piloted for use in negotiation preparation and disaster response simulation.

Lammy has been among the principal figures in the UK government stepping up diplomatic engagement with Beijing. Last autumn, he travelled to the Chinese mainland, followed by a return trip to London by his counterpart Wang Yi last month. He has intervened in favour of China’s controversial new embassy in London, which is awaiting approval.

It was important for the UK to act “with our eyes opened”, said Lammy, citing sanctions against British MPs by Beijing and China’s activities in Hong Kong as key areas of disagreement. But he added: “There’s a lot of trade that has very little to do with national security, and growth is something that we can celebrate, where it’s in our national interest.”

Additional reporting by Ben Hall in Brussels