In a written statement, Dr Fox said that the costs would be met from the Treasury Reserve.
Dr Fox said:
The current estimate of the net additional costs of military operations for six months in support of Operation ELLAMY - the United Kingdom’s contribution to coalition operations in support of United Nations Security Council Resolution 1973 - is in the region of £120m. This excludes costs associated with capital munitions expended.
Based upon current consumption rates we estimate the cost of replenishing munitions may be up to £140m.
The Treasury has agreed to meet these costs from the Reserve.
British forces have been contributing to the multinational coalition to enforce the no-fly zone and protect civilians in Libya since 19 March 2011.
At a recent NATO Defence Ministers meeting in Brussels Dr Fox stressed the progress that has been made over the course of the campaign.
Dr Fox said:
As a result of our actions we are seeing the first steps towards inclusive reform in Libya, with the creation of the National Transitional Council.
Despite our successes, the fighting in Libya continues and the welcome extension of the mission by another 90 days will enable us to continue to fulfil the objectives of our mission and give the Libyan people the freedom they truly deserve.
But there is an important distinction between what NATO could do, and what it should do. NATO should have a clear channel of communication with the National Transitional Council to help us best to respond to their concerns, and we should work within the appropriate institutions and with our allies to present a viable and lasting road to peace for the Libyan people.