Plans to hand BAE Systems a contract to supply the Royal Air Force with 30 Hawk jets would waste up to £450m of taxpayers' money, according to senior Ministry of Defence sources.
Military insiders are incensed by news that the Trade and Industry Secretary, Patricia Hewitt, has lobbied the Defence Secretary, Geoff Hoon, to give a £1bn contract to the British defence contractor to supply trainer jets, without an open competition.
The MoD has also received informal proposals and costings from Italian defence group Finmeccanica to supply its Aermacchi jet, which would be around 45 per cent cheaper than the Hawk. Officials believe the Aermacchi is technically superior to the ageing Hawk, making it more suitable for preparing pilots to fly the new Eurofighter.
In a letter to Mr Hoon, Ms Hewitt argued that BAE should be awarded the contract in order to preserve Britain's manufacturing base, as Rolls-Royce and Smiths Group are both suppliers. Selecting the Hawk would also safeguard jobs at BAE's factory at Brough in East Yorkshire. This is close to the constituencies of Deputy Prime Minister John Prescott and Trade minister Alan Johnson.
"The point is about industrial defence policy and the implication for UK jobs," said a source close to Ms Hewitt.
In November, BAE announced 450 redundancies at Brough and told a further 470 workers their jobs were under threat. However, Finmeccanica is understood to have pledged to build the aircraft in the UK, possibly at BAE's assembly line in Brough. The company has also told MoD officials it may use Rolls-Royce as its engine supplier.
"The DTI analysis is very thin," said one source close to the MoD. "If we went for the Aermacchi, there would also be the potential to sell the trainer aircraft to other countries that use Eurofighter."
A spokeswoman for the MoD said: "We received formal proposals from BAE Systems on 31 March. We are analysing these. A decision on whether to give the contract to BAE or hold an open competition will be made at the end of June. We haven't ruled anything in; we haven't ruled anything out."
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