A Ministry of Defence committee is meeting to decide who should win a new air-to-air missile contract which could bring as much as £200m to the Scottish economy.

The two defence companies competing for the contract - Raytheon and BAe Systems - both employ hundreds of workers in Scotland.

The air-to-air missiles will be used to arm the new Eurofighter Typhoon jets, some of which will be based at RAF Leuchars.

The American company Raytheon is bidding against a European consortium which includes BAe Systems.

Jobs safeguard

Raytheon employs 640 people in Glenrothes and the company says winning the contract would safeguard those jobs and bring a £200m boost to the Scottish economy.

BAe Systems has around 800 people working on radar systems in Edinburgh.

It says it will create a further 50 jobs if its Meteor consortium wins. There could be longer term benefits from exporting the technology, it predicts.

The Ministry of Defence's equipment approval committee is discussing the contract but a final Cabinet decision is not expected until later this year.

The MoD announced in December that RAF Leuchars would be home to one of the three RAF bases for the Eurofighter Typhoon jet.

Replacement aircraft

Leuchars was chosen with RAF Leeming in North Yorkshire and RAF Coningsby in Lincolnshire.

The aircraft will officially come into service in the summer of 2002.

The Eurofighter Typhoon was designed and built in a joint project between the UK, Germany, Italy and Spain.

The UK intends to buy 232 aircraft to replace its entire Tornado F3 and Jaguar forces, at an estimated total cost of £16.1bn.