John Healey, the defence secretary, has held urgent talks with the boss of Leonardo, the Italian defence contractor, amid fears for thousands of jobs at a military helicopter factory in Somerset.
Sky News has learnt that Mr Healey met Roberto Cingolani, Leonardo’s chief executive, on Friday for talks about an ongoing tender process which could throw into doubt the future of the Yeovil plant.
Leonardo is vying for a £1bn Ministry of Defence contract to build so-called medium-lift military helicopters, but has yet to get the nod despite the government’s aim of finalising a deal by the end of last year.
Money latest: What interest rate hold means for your money
In addition to the 3,000 people employed at Yeovil, a further 9,000 supply chain jobs are said to be dependent on the site.
Mr Cingolani wrote to the defence secretary in December to warn that Leonardo’s future investment in Britain could be in jeopardy if it did not win the contract.
“Any delay or cancellation in the programme award… would force a re-evaluation of Leonardo’s UK presence, including investment in electronics and cyber security divisions,” he wrote in a letter reported by The Daily Telegraph.
Last weekend, The Sunday Times said a Cabinet row had erupted over the tender process, with the Treasury reportedly questioning the need for Britain to retain a sovereign military helicopter manufacturing capability given the changing nature of modern warfare.
A Ministry of Defence spokesperson said: “The UK’s New Medium Helicopter programme is ongoing and no final procurement decisions have yet been made.
“That outcome will be confirmed in due course.”
The MoD declined to comment on Friday’s meeting between Mr Healey and Mr Cingolani.