US diplomats lobby to stall BAE fighter jets

On the eve of the Farnborough Air Show, a row is breaking out between British and American arms makers.

On the eve of the Farnborough Air Show, a row is breaking out between British and American arms makers.

US diplomats in Budapest have been lobbying the new Hungarian government to renege on a signed £250m deal to lease 14 BAE Systems Gripen fighter planes, in favour of US aircraft.

According to sources close to the defence ministry in Budapest, despite Lockheed Martin's F-16 losing an open tender: "The Americans are still briefing against the Gripen, in light of the new government's commitment to re-evaluate all of its predecessors' contracts, although it is hard to say whether this comes from the State Department or the Pentagon."

Gyula Meszaraos, a former fighter pilot who advised the parliamentary defence committee under the last government, told The Independent on Sunday: "The defence minister now takes the view that we should reassess the Gripen."

Next week the foreign minister, Laszlo Kovacs, will go to Washington, and expects to come under some pressure over the fighter deal. In October, Jane's Defence Weekly reported a "last ditch" offer by US ambassador Nancy Goodman, one month after Gripen was announced as winner.

The US embassy in Budapest refused to comment, but the chief US objection to the Gripen is believed to focus on an alleged lack of interoperability with other Nato systems, and on its lack of air-to-air refuelling capability. Yet few expect that Nato, which has a surplus of combat aircraft, will send tiny packets of Hungarian fighters across the globe on operations requiring mid-air refuelling.

Regionally, the US is concerned that Gripen is establishing a dominant market position in eastern Europe, and industry sources say that reversing the Hungarian deal, or raising questions about the aircraft's suitability, will affect other negotiations: in the Czech Republic a deal for Gripen is stalled at the parliamentary approval stage, and Poland will decide on a $3bn-$3.8bn (£1.9bn-£2.4bn) fighter tender in December.

Polish president Aleksander Kwasniewski visited Washington this week on only the second state visit to the US during President Bush's term. Ahead of the visit Mr Bush told a group of Polish journalists: "We will offer a fabulous product called the F-16 and we will work with our friends in order to compete on an above-board basis."

He went on: "We will respect the process and respect the country, and appreciate it's a tough decision, and hope they make the right decision as far as we're concerned." Whether the US has scrupulously respected the decision of the Hungarian government, however, is open to question.