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By David Morgan

WASHINGTON, April 3 (Reuters) - U.S. Defense Secretary Robert Gates will unveil his budget recommendations for fiscal year 2010 on Monday in a proposal likely to call for major changes in priorities, a defense official said on Friday.

Gates, who will spend the weekend making his final decisions, will also take the unusual step of notifying members of Congress about his choices before sending the budget proposal to the White House Office of Management and Budget.

"These are not changes to the margins. This is a fundamental shift in direction," Pentagon press secretary Geoff Morrell told reporters.

Gates wants to explain the shift in resource allocation to Congress and the American people, Morrell said, so after speaking to lawmakers by telephone, the secretary will hold a news briefing at the Pentagon on Monday.

Morrell did not disclose details of the options facing Gates, who believes the defense budget should better reflect the needs of irregular warfare strategies being employed in Iraq and Afghanistan.

Gates has been in close contact with President Barack Obama and White House staff throughout the budget process. But his press secretary stressed that no agreements have been reached. "This does not in any way suggest that the White House has embraced these recommendations," Morrell said.

Gates' approach to the budget has been guided by the national defense strategy he issued last July, which named "the long war" against global extremism as the top U.S. priority and pledged to avert conventional threats through dialogue.

The defense chief has promised tough scrutiny for expensive weapons systems and sought to keep budget deliberations quiet by requiring Pentagon officials to sign special nondisclosure agreements.

Experts speculate the budget could include major changes to 55 weapons programs, including some cancellations and a few increases in funding.

U.S. defense companies have been anxiously awaiting news about major weapons programs and concerns about pending cuts have weighed heavily on defense stocks in recent weeks.

Obama asked Congress in February to increase the Pentagon's regular budget to $533.7 billion next year -- up 4 percent, or $20.4 billion, from its spending plan for the current year, drawn up under the Bush administration.

Defense officials have been working out the details for exact funding levels within the overall budget, which brings the curtain down on the big growth in defense spending during the Bush administration but still gives the Pentagon an increase at a time of economic crisis. (Additional reporting by Andrea Shalal-Esa, editing by Anthony Boadle)

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