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EDITIONS
 Sunday, 26 January, 2003, 15:41 GMT
MoD plays down 'joint carrier deal'
The HMS Ark Royal leaves Rosyth in Scotland
The Ark Royal is set to be replaced by the new carriers
The Ministry of Defence is refusing to comment on reports a 10bn aircraft carrier contract is to be shared between Britain's BAE Systems and France's Thales.

The two firms had been working on rival bids to build and maintain two aircraft carriers for the Royal Navy.

According to The Sunday Telegraph, the decision to force an alliance followed the direct intervention of Prime Minister Tony Blair.

The newspaper said BAE management was furious after being given just six days to work out a joint approach to the contract.

Official announcement

The Ministry of Defence order is made up of 2.9bn in build costs for two aircraft carriers and a 6.5bn contract to maintain them over their service life.

Thales could be given overall control of the project, but BAE would be guaranteed at least 1bn out of the 2.5bn construction work at UK shipyards, the Sunday Telegraph reports, quoting senior Whitehall sources.

An MoD spokesman told BBC News Online not "to read too much into" reports the order was to be split, but refused to comment further.

He said the Mod would be making an official announcement on Thursday.

Biggest ever

There has been fevered speculation since December that BAE may lose out, given cost overruns on two other defence contracts already under way.

The order is expected to safeguard 10,000 jobs in the UK.

The two 950ft long, 60,000 tonne carriers will be the biggest British warships ever built.

The ships will replace the Royal Navy's three existing carriers, Illustrious, Invincible and Ark Royal.

A spokesman for BAE today said: "We are not speculating on the outcome of the bid."

See also:

21 Jan 03 | Business
21 Jan 03 | England
19 Jan 03 | Business
29 Oct 02 | Business
28 Nov 02 | England
26 Nov 02 | England
14 Oct 02 | Scotland
12 Sep 02 | Business
11 Sep 02 | Business
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