The government is backing proposals for radical changes to Nato's command structure which could see big cuts in the numbers of staff and command bases.
Ministers believe reform of the organisation is long-overdue and could save the Ministry of Defence tens of millions of pounds.
The government is supporting plans to cut the number of personnel from 13,000 to 9,000.
World leaders are gathering for a Nato summit in Lisbon, Portugal, on Friday.
BBC political correspondent Carole Walker says difficult decisions about which bases in which countries will close are likely to be put off.
Officials say reducing bureaucracy and duplication will make Nato more effective in countering future threats, and the government would like to streamline the network of Nato headquarters and agencies.
The changes could see the number of Nato agencies which look after areas such as logistics, communications, research and training cut from 14 to three.
The leaders are also expected to endorse the organisation's official new Strategic Concept - its first in 11 years - which sets out Nato's tasks and objectives.
But the immediate priority for Nato is still Afghanistan, our correspondent added.
At the weekend Britain and the US will seek agreement on a framework to hand responsibility for security to Afghan forces over the next four years.
Earlier this month Nato Secretary General Anders Fogh Rasmussen told the BBC that Nato alliances had to "pool their resources" if they were to work more efficiently.
Professor Michael Clarke, director of Royal United Services Institute, the defence think tank, said Nato had 11 headquarters with 20 different installations all over Europe and this was no longer appropriate.
He said a restructuring would mean fewer senior jobs for officers from different countries, but it would send an "important signal that Nato was really serious about reforming itself".
Prof Clarke told BBC Radio 4's Today programme the two biggest issues would be Afghanistan and whether Nato was about European security or promoting Western and American-led interests in the rest of the world.
"It used to say at the end of the Cold War, that Nato goes global. Well, it went global in Afghanistan and it hasn't been a howling success," he said.
"So the issue now is where is Nato's real role in the world?"
He said the US, UK and France wanted Nato to be a global organisation, while the Germans and most of the central European countries tended not to.
"Ultimately they know that Nato is their link to America," he said.
"That's a problem, though, because if Nato goes out of area it loses consensus. Nato is 28 nations now and the further away from Europe you go the harder that consensus is to get."