In secret trials last week, the Army said it had made a vehicle completely disappear and predicted that an invisible tank would be ready for service by 2012.
The new technology uses cameras and projectors to beam images of the surrounding landscape onto a tank.
Now you see it: How the tank might look with background images beamed onto the side
The result is that anyone looking in the direction of the vehicle only sees what is beyond it and not the tank itself.
A soldier, who was at the trials, said: "This technology is incredible. If I hadn't been present I wouldn't have believed it. I looked across the fields and just saw grass and trees - but in reality I was staring down the barrel of a tank gun."
How the technology works in a combat situation is very sensitive, but the MoD is believed to be testing a military jacket that works on the same principles.
It is the type of innovation normally associated with James Bond, and the brains behind the latest technology is the MoD's very own "Q" - Professor Sir John Pendry, of Imperial College London.
He said the only drawback was the reliability of the cameras and projectors.
But he added: "The next stage is to make the tank invisible without them - which is intricate and complicated, but possible."