Defence Secretary Sir Michael Fallon said it was "very important to link trade and security" in the negotiations with the European Union (EU) over the UK's future deal with the bloc.
Sir Michael said he was proud of the link and insisted the UK would go on "playing our part" in the security of the continent, but stressed some elements of that co-operation would require a new deal.
He claimed it was not a "bargaining process" but all sides would be "worse off" if there was not a deal.
The Defence Secretary also stressed the UK would protect Gibraltar "all the way" amid concerns the EU's draft negotiating guidelines give Madrid a veto over any future deal applying to the Rock.
Leaked minutes of a Cabinet committee meeting revealed the extensive discussions about how the UK's security and defence expertise could be used to help secure a deal with Brussels.
The Sunday Telegraph reported ministers identified the UK's "very strong hand" on defence as a key advantage in the talks.
Downing Street has insisted the reference in Theresa May's Article 50 notification letter to security, warning that co-operation would be "weakened" if there was not a deal, was not a threat but a simple statement of facts.
Sir Michael told BBC One's Andrew Marr Show: "It's very important to link trade and security because what we are now looking for is a deep and special partnership that covers both economic and security co-operation. Those two things go together."
He was "absolutely" proud of that link, adding: "It's very important that we go on committing to the security of the continent."
Asked if failure to secure a deal would make the EU less secure, he said: "We would all be worse-off it there wasn't a deal. We are expecting to have a deal.
"Obviously, we co-operate with Europe on security, not just through Nato - we co-operate through work our police forces do, our security agencies do, through our judicial systems.
"Some of that is inside the European treaties, some of it is outside.
"But obviously the bits that are inside the European treaties we need to make sure that co-operation continues, because Europe faces threats - not just from Russian aggression but, as we have seen in recent weeks, from terrorism as well."
Asked about the Sunday Telegraph report, he said: "I'm not going to get into what happened at what meeting, but it is a fact that we have the biggest defence budget in Europe, we are a leading player inside Nato."
Sir Michael also refused to be drawn on the details of any "implementation" agreements which could cover trade and the economy after Brexit.
Pressed on whether free movement could still be happening and the UK could still be subject to the European Court of Justice at the time of the next election, he said: "No, we have made it clear that we are leaving the European Union, we are leaving the single market, we are leaving the customs union and we will no longer be under the ambit of the European Court of Justice.
"It is also clear that we have to avoid a cliff edge.
"We need to give business and the various sectors of our economy the certainty that they need that there won't suddenly be a huge difference between the day after we leave and the day before."
The issue of Gibraltar was raised in the draft EU negotiating guidelines circulated last week by European Council president Donald Tusk.
Spain has a long-standing territorial claim on Gibraltar, which has been held by the UK since 1713 and has the status of a British overseas territory.
Gibraltar is addressed in a single paragraph of Mr Tusk's nine-page document which says: "After the United Kingdom leaves the Union, no agreement between the EU and the United Kingdom may apply to the territory of Gibraltar without the agreement between the Kingdom of Spain and the United Kingdom."
The issue was not mentioned in Mrs May's Article 50 letter but Sir Michael said: "Gibraltar is going to be protected all the way because the sovereignty of Gibraltar cannot be changed without the agreement of the people of Gibraltar and they have made it very clear they do not want to live under Spanish rule.
"It is interesting in the draft guidelines from the EU that Spain is not saying that the whole thing is subject to the transfer of sovereignty."
Gibraltar's chief minister Fabian Picardo has lobbied ministers to ensure its interests are represented and said the issue was referred to "tangentially" in Mrs May's letter, which referenced the Government's white paper on Brexit.
He told the Andrew Marr Show: "I'm not thrilled that we are in the situation in which we are - Gibraltar voted 96% to remain.
"But we have energetically and enthusiastically decided that we have to support the Prime Minister in this process of making Brexit a success for Britain and for Gibraltar.
"Therein lies the rub. When we get the deal on Brexit, it must be a deal that applies across the United Kingdom in respect of future trade and if there is such a deal, it is only fair, proper and right that it should also apply to Gibraltar."