BAE loses battle over spy in the sky

FRENCH defence giant Thales has beaten Britain's BAE Systems in a £800m battle to supply the British military with unmanned spy planes.

BAE Systems was a partner in a rival consortium headed by Northrop Grumman of America.

Thales, 32%-owned by the French government, will be told of its success at this week's Farnborough airshow. In a week when the Ministry of Defence will announce big cutbacks to conventional forces, it shows the importance the military attaches to high-tech warfare systems.

The deal is good news for the British partners of Thales, including LogicaCMG, Marshall, Vega, and QinetiQ. They should benefit as the multi-billion-pound world market for spy planes - officially, Unmanned Aerial Vehicles - expands.

The project is also expected to create 2,500 British jobs.

Elbit Systems, an Israeli-owned company, will supply the spy plane engines from its factory in Lichfield, Staffordshire.