The talks take place against the background of a continuing and confusing game of brinkmanship, with unnamed Taiwanese cabinet officials being quoted in local newspapers yesterday as saying the deal was 'alive in name but dead in reality'. BAe's partner, the Taiwan Aerospace Corporation, will meanwhile vote on whether to cancel the joint venture, known as Avro, at a board meeting on 19 October.
If the deal does collapse it would threaten 3,000 jobs in BAe's regional jet division at Woodford, near Manchester, and could force the company to make further heavy provisions on top of the pounds 1bn set aside last year to rationalise its commercial aircraft activities.
Last night both BAe and British diplomats in Taiwan were playing down talk of a collapse, describing newspaper reports as speculative and exaggerated. 'We have had assurances from the Taiwanese that they remain fully committed to this joint venture. Negotiations will resume very shortly,' BAe said.