Deal agreed on Euro-fighter

THERE WAS cautious optimism from Britain on the future of the European Fighter Aircraft (EFA) last night after a meeting of the four partners in Madrid.

They agreed to stay together at least until the end of October, with the Germans remaining in the development phase of the fighter, which they know as Jaeger 90. The Spanish Defence Minister, Julian Garcia Vargas, said the four had basically agreed to work on redesigning the plane. 'Spain's current economic circumstances do not allow it proceed into the production (phase) as it stands,' he said.

In addition to a study of comparative costs, the chiefs of air staff of all four countries - Britain, Germany, Italy and Spain - have been asked to reaffirm the military requirement for EFA. This is seen as heading off the view of Volker Ruhe, the German Defence Minister, that changes in the strategic environment might permit a less sophisticated jet.

'The Jaeger 90 is dead and what is being discussed now is the opportunity for the development of a new Eurofighter that costs less than DM90m (pounds 31m) and that is adapted and adequate to the changed security situation,' Mr Ruhe told reporters. He said he hoped to meet colleagues in Sweden and France to discuss their joining the project.

Malcolm Mr Rifkind, the Secretary of State for Defence, said: 'Obviously we were very pleased to get agreement.' Britain hopes the Germans will remain in the project, although it could continue with three nations without substantial increases in cost. With development nearly complete and the first aircraft due to fly in the autumn - in Germany - sources said yesterday that the British were investigating building it alone.

Industry sources estimate that a new 'lighter, cheaper fighter' would cost up to 20 per cent more than EFA, and that does not count the pounds 5bn of EFA development that would be wasted. In contrast, British Aerospace has said it could supply the RAF with 250 EFAs for the same price on the basis of a three-nation project as for a four-nation project.