President George Bush’s plans to establish a European missile defence system suffered a big setback on Thursday when a Congressional committee slashed the funding.

The House appropriations committee cut $139m from the $310m the Bush administration wants for preparatory work on the missile project in Europe. It approved funds for a radar system in the Czech Republic but cut the $139m Bush requested to establish a missile interception system in Poland, the most controversial part of the defence system. In addition, the committee cut a further $159m from US-based parts of the missile plan.

John Murtha, chairman of the committee, said the Bush administration has “got to convince us this is worthwhile”.

In a report attached to the revised budget, the committee said: “It is premature to provide full funding for the European component, given the uncertainty surrounding the programme.”

The Congressional move came as Des Browne, the defence secretary, said on Wednesday that the United Kingdom had agreed to allow the United States to upgrade the Menwith Hill airbase in Yorkshire as part of the proposed missile defence system. Britain has already approved a radar system at Fylingdales on the North York Moors.

Bush wants to place 10 interceptor missiles in silos in Poland, saying they are needed as a matter of urgency to defend against Iran, which the US claims is pushing ahead with a nuclear weapons programme.

As well as reducing the budget, Congress is shifting priorities from futuristic programmes to more immediate concerns, such as improved healthcare for soldiers returning from Iraq and Afghanistan, pay rises for soldiers and marines, and much-needed weaponry for Iraq, such as the heavily-armoured Stryker vehicles.

The House and Senate have questioned whether establishing the system in eastern Europe is sensible given the extent of the opposition it has aroused in Russia. They also question its technical feasibility and the failure of other Nato countries to commit fully to it.