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Last Updated: Wednesday, 5 October 2005, 16:37 GMT 17:37 UK
Airbus 'to turn down state money'
Artist's impression of the Airbus A350
The A350 is designed to rival the forthcoming Boeing 787
Airbus is to forgo government aid in developing its new A350 plane in a bid to calm a subsidies row between Europe and the US, media reports say.

Allegations of unfair state aid for both Airbus and US rival Boeing are currently under investigation by the World Trade Organisation.

Airbus had initially asked EU governments for approximately 1.5bn euros ($1.8bn; 1bn), reports said.

The Toulouse-based firm said it could not comment on speculation.

'Unfair advantage'

Work on the mid-sized A350 is expected to be officially launched on Thursday.

It is intended to be a rival to Boeing's planned 787 Dreamliner.

Both Brussels and Washington claim the other side gives its main passenger airline manufacturer illegal state aid - and thus an unfair advantage in the global aircraft market.

Aeronautique Business magazine said Airbus and its majority owner - aerospace and defence group EADS - were turning down government funds so as not to aggravate the WTO negotiations.

The development of the A350 is expected to cost 4.35bn euros, and Airbus is said to have originally asked the governments of France, Germany, Britain and Spain for 1.5bn euros collectively.

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