Nato faces a “paradigm shift” after JD Vance warned that Europe must pay for its own security, a leading British defence industry boss has warned.

Charles Woodburn, the chief executive of BAE Systems, said the defence industry was ready to ramp up production to deter the threat from Russia, although he said many governments are yet to act on pledges to increase military spending.

His comments come just days after Mr Vance, the US vice president, warned European leaders that they must “step up in a big way” on rearmament.

Mr Woodburn said: “There’s no question, it feels like quite a profound change and a paradigm shift.

“In terms of how that evolves – in terms of Europe’s thinking, Nato’s response and what the sense is of the new number to be aiming for – I think we’ll learn more in the coming couple of months.

“There’s lots of rhetoric but that has not, as yet, translated into a clear set of budgets that we will be looking for in order to make those plans that we need.”

On Wednesday, BAE said rising geopolitical threats around the globe had led to £34bn of sales last year, taking its backlog of equipment orders to a record £77.8bn.

The FTSE 100 giant, which is Europe’s biggest defence company, makes everything from nuclear-powered submarines to artillery shells and Typhoon fighter jets.

And with tensions running high in Europe, as the US seeks to broker a peace deal between Russia and Ukraine, BAE is predicting at least another £30bn of further sales in 2025.

That will partly be influenced by an ongoing defence review in the UK, with Sir Keir Starmer’s Government preparing to confirm when and how it will get to spending at least 2.5pc of GDP – amid pressure from Donald Trump and others to go much higher.