The defence ministers from Germany, Britain, Italy and Spain have signed a legally-binding agreement to begin production of the Eurofighter aircraft.

The plane is designed to be a vital part of the front-line defence in the next century. The four countries will share in its construction, providing thousands of jobs.

The signing of the £40bn deal in Germany clears the way for the production of 620 Eurofighters, the first of which should come into service in 2002.

The British Defence Secretary, George Robertson, said Eurofighter was crucial not just for the Royal Air Force but the future of the European aerospace industry.

Eurofighter was "the best aircraft at the best price and ready at the right time", he said.

Extra costs, delays and the end of the cold war threatened the entire project. But recent conflicts such as the Gulf War together with sales of advanced aircraft around the globe underlined the need for a world-class fighter.

Britain has a 38% stake in the project through British Aerospace and the contract is expected to provide up to 40,000 jobs in the country at peak production.

Work is expected to get under way by the beginning of 1999 and could run for 20 years if export interest proves to be strong.

British industry is primarily involved in construction of the front end of the aircraft - the cockpit, stabilising wings at the front, part of the main wings, the new EJ200 engines and much of the avionics, including the advanced ECR90 radar.

The multi-billion pound project had been threatened by a series of German delays in finding funds to move to full production, with Germany's finance and defence ministries at loggerheads over how to pay for the aircraft.

The breakthrough came in October when the German Cabinet finally approved plans to buy 180 Eurofighters.

Britain is proposing to buy 232 Eurofighters for the RAF, while Italy plans to purchase 130 and Spain 87.

Some experts say that the Eurofighter is too late coming into production - the first will not be delivered until 2002 - and faces stiff competition from other fighters such as the French Rafale or American F-22 Raptor.

The British Ministry of Defence argues that the F-22 would not be a good buy because it would add an estimated £8bn to the defence budget.

Export hopes look good, with Australia, Norway and the United Arab Emirates short-listing Eurofighter as their next-generation fighter.

Interest is also expected in Saudi Arabia, the Far East -- particularly South Korea -- and South America.

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