British defence industry sources have slammed the way the government negotiated a £10bn contract to buy the American joint strike fighter for the Navy's planned two new aircraft carriers.
It could mark the "end of the UK in the manned aircraft business", they warned. A senior source added: "We got legged over. The Americans are industrial and political gorillas."
The Ministry of Defence is planning to buy 150 JSFs for the two carriers which were themselves due to cost £2.9bn. BAE Systems, the project's original prime contractor, has warned that it would cost £4bn to build two 60,000-tonne carriers.
Britain has contributed £2bn towards the JSF's development costs.
But the contract means that Lockheed Martin - the plane's manufacturer - will maintain the aircraft, also known as the F35, and produce any updated version for 50 years, the sources say.
"It's a bloody sight more than game, set and match. It's like eternity," said an industry source.
Sources say that the government gave away far too much to the Americans at a time when the US was poised to go "way beyond Europe's reach" in terms of technological capability and investment.
Under the JSF deal, Lockheed can refuse to give Britain the software codes for the aircraft which make up its avionics system and other information about its performance, industry sources say.
The problem is coming to a head with a highly protectionist amendment to the US defence authorisation bill now before Congress. Industry sources say it would put up a "solid wall".
Lord Bach, the arms pro curement minister, has attacked the US for putting up market barriers which would harm British industry and military capability.
He said the amended bill "ignores the two-to-one balance of defence trade" enjoyed by the US. He added: "Many in the UK view such moves as an insult and affront to the solidarity that we have shown to the US."
Lord Bach, who claims support from the Bush administration for the UK's stance and to have made progress on the JSF issue, said also that delays in implementing easier transfers of technology from the US to Britain meant delivery was "now long overdue" and "the frustration we feel and the message it sends are counter-productive".
Today he will signal greater union involvement in the government's defence industrial policy by announcing the pending appointment of a senior official to a key government-industry body.
Lord Bach will tell the shipbuilding conference of engineering union Amicus that John Wall, the union's national secretary for aerospace and defence, is to serve on the National Defence Industries Council. His formal appointment is expected later this year.
The council helped draw up the government's defence industrial policy which puts a premium on employment, manufacturing capability and intellectual property in decisions about multi-billion pound military contracts.
Mr Wall's appointment, promoted by Geoff Hoon, defence secretary, is further evidence that ministers are strengthening the hands of the unions - and making British jobs a priority - in awarding such contracts. Amicus is expected to criticise ministers tomorrow for their spending record on defence procurement - and the drive by British arms companies to invest in the US.
