THE consortium bidding for the contract to supply a weapons systems for the Eurofighter Typhoon has warned that 1,200 UK jobs will be lost to Britain if the rival American one is chosen.

It is understood that the Ministry of Defence's equipment approval committee, which met on December 6, has put off a decision on which system to recommend and will meet again in February.

Defence analysts said it was too close to predict which system the Government will choose.

The European consortium, Matra BAe Systems, has offered the unprecedented sweetener of a cast-iron money-back guarantee on its missile, codenamed Meteor.

Alan Garwood, deputy chief executive of Matra BAe Dynamics, said: "We are so confident about Meteor we have guaranteed we can deliver on time, to budget and to full specification."

He warned that failure to choose Meteor would jeopardise 2,500 skilled jobs in Europe, 1,200 of them in the UK.

The rival American missile system is being developed by Arizona-based weapons giant Raytheon.

Its director of defence systems, Andy Head, said: "We very strongly believe that there are greater employment opportunities with our weapon. We estimate 3,120 jobs would be created or sustained in the UK."

He said Raytheon's bid was transatlantic, rather than a purely American one. The UK and US would have joint control and half the missiles would be produced in the UK, he pledged, adding that the Government could save itself a "huge amount" of money by choosing its missile.

Mr Garwood acknowledged that the £500million to £1billion cost to Britain of choosing Meteor - which would be ready by 2008 - was more than the cost of the Raytheon offering, but argued that it was a better missile.

A Ministry of Defence spokesman said: "We have two bids on the table and ministers have not yet reached a decision, nor will they till sometime in the the New Year.

"Factors taken into account will be the need to get the best equipment for the Services and the best value for the taxpayer, and international relations and industrial factors."

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