A leaked document suggested dropping the army's historic crest and 'Be the Best' motto over concerns they were elitist.
Earlier, the defence secretary was accused of pursuing a policy that “belongs in a Netflix series.”
"A dead terrorist can't cause any harm to Britain," he added.
The hole in the Ministry of Defence's budget is apparently £1.7bn a year, which could see thousands of armed troops cut.
The Argentine navy announced that a sound thought to be an explosion had been detected by US and specialist agencies leading the search.