Jens Stoltenberg added that the bloc must show its nuclear arsenal to the world to send a direct message to its foes in an interview with The Telegraph.
He revealed there were live consultations between members on taking missiles out of storage and placing them on standby as he called for transparency to be used as a deterrent.
Mr Stoltenberg said: “I won’t go into operational details about how many nuclear warheads should be operational and which should be stored, but we need to consult on these issues. That’s exactly what we’re doing.”
In a wide-ranging interview at the Nato headquarters in Brussels, he gave a stark warning about the threat from China. He also said he expected a Labour government to be a staunch Nato ally and defended new plans to Trump-proof weapons deliveries to Ukraine.
Mr Stoltenberg said nuclear transparency should be the cornerstone of Nato’s nuclear strategy to prepare the alliance for what he described as a more dangerous world.
A decade ago when the 65-year-old assumed his role at the top of the bloc, nuclear exercises were conducted in complete secrecy.
Now he openly praises a number of its 32 allies for contributing to the deterrent, including most recently The Netherlands for investing in dual-capable fighter jets that can host US nuclear weapons.
“Transparency helps to communicate the direct message that we, of course, are a nuclear alliance,” Mr Stoltenberg said. “Nato’s aim is, of course, a world without nuclear weapons, but as long as nuclear weapons exist, we will remain a nuclear alliance, because a world where Russia, China and North Korea have nuclear weapons, and Nato does not, is a more dangerous world.”
He warned that China in particular was investing heavily in modern weaponry including its nuclear arsenal, which he said would grow to 1,000 warheads by as early as 2030.
"And that means that in a not-very-distant future,” he said, “Nato may face something that it has never faced before, and that is two nuclear-powered potential adversaries – China and Russia. Of course, this has consequences.”
Mr Stoltenberg’s warnings come after the G7 sharply criticised China and Russia in a communique last week that called on Beijing to stop supplying weapons technology to Moscow and opposed China’s “militarisation” in the Pacific.
Both the US and UK have committed their nuclear deterrents to Nato, while other European allies share the burden of the responsibility by storing weapons on their territory and investing in the systems to launch them.
The number of operational nuclear weapons is top secret but estimates suggest the UK has about 40 of 225 deployed at any one time. The US has about 1,700 of 3,700.
France, Nato’s third nuclear power, does not make its atomic arsenal available to the alliance because of a long-held decision to maintain independence over its own deterrence.
Mr Stoltenberg insisted that the US and its European allies were now modernising their nuclear deterrent in the face of increased threat from Russia.
He said: “The US is modernising their gravity bombs for the nuclear warheads they have in Europe and European allies are modernising the planes which are going to be dedicated to Nato’s nuclear mission.
“Then, of course, you have the United Kingdom, which is special because the United Kingdom has its own nuclear weapons.”
On Sunday, the BBC reported that a Russian submarine that is now in Cuba was seen off Scotland’s coast last week.
The Kazan is capable of carrying advanced weapons, according to Russia’s defence ministry, but it did not enter UK waters. The Ministry of Defence nevertheless briefed the prime minister.
Vladimir Putin has repeatedly threatened to use nuclear weapons in Ukraine and has deployed warheads closer to Europe’s borders. However, he has more recently dialled down his threats.
The head of Nato refused to discuss how many warheads should be pulled from storage warehouses and put on standby, but revealed there were live consultations on the issue.
Before the invasion, Nato was struggling to convince the majority of its allies to hit the minimum threshold of two per cent expenditure as a share of their GDP for defence spending.
When the latest figures are released ahead of the Nato summit in Washington next month, Mr Stoltenberg believes more than 20 will hit the goal – a decade since the target was established.
In the wake of Russia’s invasion of Ukraine, Britain was put on a trajectory to increase spending on defence to 2.5 per cent of national wealth by 2030.
But with Rishi Sunak’s Conservatives expected to be replaced by the Labour Party, there are doubts whether the pledge will stick.
Sir Keir Starmer has said his party wanted to reach the 2.5 per cent target as soon as resources allow that to happen, rather than a fixed date.
Mr Stoltenberg, who served as the leader of Norway’s Labour Party between 2002 and 2014, would not be drawn on the politics of Britain’s election campaign.
However, he said: “I expect that the UK, regardless of the outcome of the election, will be as strong, staunch Nato ally, and also an ally that will lead by example of defence spending, as the UK has done for many years.
“The reality is that we all reduced defence spending when tensions went down after the end of the Cold War. And now we need to increase defence when tensions are going up again.
“I have been prime minister for 10 years, I know that it’s hard to find money for defence because most politicians always prefer to spend money on health, on education, infrastructure and other important tasks.
“But when we reduce defence spending when tensions go down, we have to be able to increase them when tensions go back up – and that’s exactly what allies now are doing, the United Kingdom, but also other allies.”
Mr Stoltenberg has not always been so reticent to wade into domestic politics in recent months.
When Republicans loyal to Donald Trump held up a $60 billion £47 billion) aid package for Ukraine, the Nato chief repeatedly warned the delays were helping Putin’s Russia seize territory.
He then came out in support of Kyiv over its request to use Western weapons on targets inside Russia.
And now ahead of the next Nato summit, he has tabled proposals for the alliance to play a greater role in the West’s support for Ukraine.
About 99 per cent of the weapons deliveries to Kyiv are done so by Nato allies, he says.
His new Nato security assistance and training for Ukraine scheme – downgraded from the Mission to Ukraine because of German fears over Russian escalation – will have 700 Nato personnel stationed at its headquarters in Wiesbaden, Germany, take over the bulk of the coordination of aid from the Americans.
Mr Stoltenberg said, cautious not to mention the looming prospect of the election of Mr Trump: “This is a proposal which is about making the support for Ukraine more robust, more long term, more predictable, and that’s something which is important regardless of the outcome of the elections in the United States.
“We saw the gaps and delays this winter, where several allies were not able to deliver the support they had promised. We have to minimise the risk of something like that happening again.”
He added: “If we have a Nato support, security assistance and training effort combined with a long-term financial pledge, I think we will give a much stronger message to Moscow that President Putin cannot wait us out.”
But it is not just the US where support for Ukraine could be flipped on its head.
Last week, France’s Emmanuel Macron called snap elections after his party was defeated in the EU voting by far-Right leader Marine Le Pen, who has previously enjoyed close ties with Putin and called for closer relations between Nato and Moscow.
Mr Stoltenberg said: “I believe it is in the interest of all allies, including France and others, to keep Nato strong because we live in a more dangerous world.
“In a more dangerous world, it’s even more important that North America and Europe stand together.
“Then, of course, we are 32 democracies and it’s part of democracies that we have different parties, different views, different opinions, but experience over these decades is that despite all these differences, there has always been strong support for Nato.”
And in a call for them to continue arming Ukraine, he concluded: “I strongly believe that if Putin prevails in Ukraine, we will become more vulnerable, and then we will need to invest even more in our defence.”
Hopefully mine too, but that’s the point I wake up if I get that far. There’s no living in a Mad Max world in my dream. It’s always about the total lack of control as the world ends.