Door left open to Eads as Westland secures £1bn helicopter order

The Ministry of Defence chose Agusta Westland as its preferred partner for a £1bn helicopter contract, but bowed to pressure from other government departments yesterday and agreed to award the remainder of its £3bn helicopter programme through an open tendering process.

The Ministry of Defence chose Agusta Westland as its preferred partner for a £1bn helicopter contract, but bowed to pressure from other government departments yesterday and agreed to award the remainder of its £3bn helicopter programme through an open tendering process.

Eads, the French-German defence company behind the Eurocopter, yesterday said it would join in the bidding for parts of the remaining business.

Fearing that Westland, owned by the Italian defence company Finmeccanica, would land the entire £3bn contract without the Government considering any outside tenders, Eads submitted an unsolicited bid to the MoD this year. A spokesman for Eadssaid: "Eads welcomes the competition."

It is understood that Eads said it could deliver substantial cost savings to the taxpayer and was part of a commitment by Eads to build a large industrial presence in the UK.

The MoD is also thought to have come under pressure from the Treasury, which was unhappy that Westland was being lined up for the business without considering other bidders. Gordon Brown is understood to favour a fully competitive tendering process for all government contracts to ensure taxpayers get the best value for money.

An announcement on the deal had not been expected until the summer, and some industry observers suspected pre-election political motives could be behind yesterday's briefing. The deal safeguards 4,000 jobs at Westland, based in Somerset, which is likely to provide support for the Government in the run-up to the election.

Geof Hoon, the Secretary of State for Defence, defended the MoD's decision to go ahead with Westland's Future Lynx helicopters without considering outside offers. He said it would provide better value for money because of the existing relationship between the MoD and Westland, and the knowledge the army has of Westland's products.

"Competition remains the cornerstone of our procurement," Mr Hoon said. "However, value for money judgements can sometimes suggest different approaches ...We believe the Future Lynx represents a highly capable, value for money, solution to our requirement."