At a meeting in Paris yesterday, David Cameron and Nicolas Sarkozy agreed that Britain and France would strengthen their military and nuclear co-operation, create a joint command and control centre for armed operations, and speed the development of a new generation of battlefield drones.
The new Anglo-French civil nuclear agreements, potentially worth £10bn in the longer term, will create 1,500 jobs and bring in £500m in new commercial nuclear deals.
Rolls-Royce will benefit from a first-phase £400m share in the building of new nuclear plants. The firm will contribute power plants for the next generation of UK nuclear generators which were announced last year. It will also deliver components – initially worth £100m – for the reactors that will be assembled in the UK. France's nuclear specialist, Areva, will supply the cores.
The two governments announced they would also be working with the International Atomic Energy Agency to strengthen the international community's ability to deal with nuclear emergencies, such as the Fukushima disaster 11 months ago.
Last year the UK government confirmed eight sites where nuclear plants are likely to be built. Preparatory work, with a budget of £100m, has already started at Hinkley Point in Somerset – despite protests from environmental groups, which say Westminster has sidelined planning regulations.
Mr Cameron and Mr Sarkozy hinted that the new co-operation on nuclear power may be extended to both countries' defence policies.
Their announcement of a joint military command and control centre will cement the command roles Britain and France assumed over Libya last year, with United Nations approval. Mr Cameron described the combined role as a "real breakthrough" saying it would save money and improve the military capabilities of both countries.
BAE and Dassault, the French aircraft manufacturer, were given the go-ahead in Paris to collaborate in the development of new"fighter" drones.
The project, with a 2020 delivery date, comes after British and French military criticism that both countries relied too heavily on US Reaper MQ-9 drones. The new project aims to take the battle-field capabilities of drones, linked to both surveillance and attack, to a new level.
The Cameron-Sarkozy pact is likely to annoy both Eurosceptics in the UK, and the US defence establishment, which believed the previous Franco-British joint declaration on European defence, made in St Malo in 1998, challenged Nato's authority and balance.
The St Malo deal called on the European Union to play its full role on the international stage by creating both a common EU defence policy and "credible" EU defence force that would be able to respond to international crises.