Laboratories to be sold off next year

The government yesterday said it would press ahead with plans to part-privatise Britain's defence research laboratories.

The government yesterday said it would press ahead with plans to part-privatise Britain's defence research laboratories.

Geoff Hoon, Secretary of State for Defence, said the Defence Evaluation and Research (Dera) would be split, with a third - 3,000 scientists - retained in the public sector.

The rest will be re-employed by a private company, the Government keeping a "golden share".

In a Commons statement Mr Hoon said he hoped to float the company by 2001, augmenting the defence budget by £250m. The sector remaining in public hands will include the chemical and biological laboratories at Porton Down. Mr Hoon said: "Our approach will offer the best value to the taxpayer whilst ensuring that our armed forces retain access to leading technology."

The Defence Ministry, pressed by the Treasury, had proposed selling Dera entirely. It came up with a compromise after opposition from the US, which said it would not trust military secrets with a British private company. Yesterday Mr Hoon said US concerns had been addressed. "We have consulted particularly closely with... the US Department of Defense, who have stressed how much the US looks forward to continued strong and effective interaction in defence research co-operation."

But Iain Duncan Smith, shadow Defence Secretary, said: "This is going to be a rushed and botched privatisation which will seriously damage the special relations we have with the US."

Mr Hoon also said that the Government is to go ahead with buying Maverick anti-armour missiles to improve the RAF's ability to attack ground targets. Mr Hoon made the Dera announcement as he outlined how £1,250m of new money from last week's spending review would be spent on defence.