UNION leaders at BAE Systems' Lancashire plants at Samlesbury and Warton are seeking early talks with management following reports of a major rift between the company and the government.

Around £2billion has been wiped off the value of Britain's biggest defence contractor amid fears that the company could be hit with a massive bill for overspending on two major projects.

And after unconfirmed reports that the Ministry of Defence was considering cutting its order for the Lancashire-made Eurofighter Typhoon, union leaders are asking for clarification.

Convenor Barry Culshaw said he was trying to arrange a meeting with the director of the Eurofighter project.

It is hoped to discuss any implications for the two Lancashire plants.

"It is quite clear there have been negative reports over the past few days," he said.

"There has been a lot of speculation and we want to discuss what damage, if any, there is to programmes at Warton and Samlesbury.

"Then we can deal with any issues that may be thrown up."

BAE is reported to have overspent by £1 billion on the Nimrod patrol aircraft and the Astute attack submarine.

There has also been media speculation about the third phase of the Eurofighter programme and the MoD demanding a bombing capability for the plane.

BAE's share price hit an all-time low of £1.04 last week before recovering to £1.14.

In May, shares in the company were worth £3.84.