Yesterday's crash - the second involving the Anglo-Italian EH101 - came a month after Malcolm Rifkind, the Secretary of State for Defence, decided to buy 22 battlefield versions of the helicopter.
Four years ago, 44 naval versions were bought for the Royal Navy in a £1.5bn deal with Westland. The company said the machine which crashed today was a Navy variant pre-production model which had completed all but 250 hours of its 3,750-hour test programme.
Experts doubt that a design fault was to blame. Crash investigators will be looking to see if there was a "catastrophic failure" of a vital component.
The crash, at Yarcombe, Devon, happened while the helicopter was undergoing high level performance tests at 12,000ft - 3,000ft short of its ceiling - after leaving the Westland base at Yeovil, Somerset. The aircraft's chief test pilot, Captain John Dickens, who suffered severe back injuries, was praised by Westland for bailing out late to avoid houses. The rest of the crew were named as second pilot Don Maclaine, and flight test engineers Alastair Wood and Geoff Douthwaite. They will be questioned as part of a Civil Aviation Authority and Ministry of Defence inquiry.
Capt Dickens, an ex-Royal Navy pilot, was taken by air ambulance to the Royal Devon and Exeter Hospital.
Westland said it was too early to say if the accident would have an impact on the development programme. Two years ago, the crew of an Italian model of the aircraft was killed when their machine crashed.
Mr Rifkind overruled his accounting officer - Malcolm McIntosh, Chief of Defence Procurement - last month to buy a mixed fleet of 22 EH101s and 12 American Chinooks.
The decision, made to safeguard the future of the British helicopter industry, cost the taxpayer £300m more than an all-Chinook fleet.