9 Jan 03. The FT reported that the UK government has had to find an extra £30m to bail out the Meteor air-to-air missile, one of Europe’s showpiece defence collaboration projects, to make up for German cuts to the programme.

The delay by Germany to commit to the programme – which could be worth up to £5bn – as it sought to balance its defence budget had at one stage threatened to undermine the project. Last month the Luftwaffe was forced to more than halve the number of units it intends to buy to just 600. Germany remains the second biggest customer for the missile after the UK.

Failure of the six-nation programme, which is being built by MBDA, the pan-European missile company, would have proven highly embarrassing for Tony Blair. In 2000, Downing Street snubbed Washington over buying the US alternative as part of its efforts to show its commitment to European defence integration.

The Luftwaffe’s reduction in the number of missiles was accompanied by a 5 per cent cut in the workshare for Germany, cutting its share of the development costs to 16 per cent.

The Ministry of Defence, also struggling with an overstretched budget, was forced to pick up the slack, increasing its share of the £600m development costs to nearly 40 per cent. One defence official estimated the move would cost the taxpayer an extra £30m. But it would also lead to the transfer of some 100 jobs from Germany, with 1,300 of the 2,500 workers on the programme now based in the UK. The deal brokered with Berlin finally led to the signing of the Meteor contract just before Christmas, some two years late. MBDA insisted this week that it could still meet the scheduled in-service date of 2010 for the RAF, despite fears that the missile would be delayed by at least a year. Meteor will become the main weapon for the Eurofighter Typhoon, the delayed fighter aircraft due to enter service with the UK, Germany, Italy and Spain next year.