Swiss voters are deciding on November 26 on a proposal to drastically reduce defence spending over the next 10 years. The move has prompted further debate about Switzerland's defence capability and its policy of armed neutrality.

Under the proposal, part of the money saved would be used for international projects to promote peace, including development aid and disarmament.

It foresees gradually slashing the army's current annual budget of SFr5 billion ($2.75 billion) to just over SFr3 billion ($1.7 billion).

The people's initiative was launched by left-wing parties as well as peace and development aid groups.

Supporters of the move want a third of the proceeds to be earmarked for international peace efforts. Under the proposal, it would be left to parliament to allocate the remaining two-thirds of the money.

Both the government and parliament have come out against the initiative, saying it would damage the country's defence capability and lead to massive job cuts.

However, supporters say Switzerland has one of the biggest and most expensive armies in Europe. They also claim that the defence cuts made by the government over the past decade are small by comparison with other countries.

Three of the four government parties have recommended a "no" vote. Only the centre-left Social Democrats are in favour.

The size and role of Switzerland's militia army has become a hotly contested issue since the end of the Cold War era and the collapse of Communism in eastern Europe a decade ago.

A people's initiative to cut defence spending to fund social welfare projects was declared invalid by parliament in 1995 before it came to a nationwide vote.

At the height of eastern Europe's political changes in 1989, the Swiss electorate overwhelmingly turned down a proposal to abolish the armed forces altogether, but the large number of "yes" votes - 35 per cent - caught many observers by surprise.

The government this year announced plans for major army reforms. They include cutting the number of conscripts to just over 120,000 and introducing new service models.

Swiss soldiers have increasingly been taking part in overseas missions in recent years, and a debate is currently underway over what role of they should play in peacekeeping operations and whether this compromises Swiss neutrality.

The government and parliament want Swiss troops to be armed. But nationalist groups - opposed to any challenge to Switzerland's traditionally neutral status - are against the proposal.

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