ALCATEL, the French telecoms-equipment group, is considering a £5 billion bid for the French defence group Thales, the second-largest supplier to Britain’s Ministry of Defence.

City sources said last night Alcatel was considering the move as a defence against tough international telecoms markets — Marconi was forced to sell to Ericsson after losing a key contract earlier this year — and to take advantage of French political wrangling over the future of Thales.

The future of the defence group, in which the French government has a 31% stake, has been uncertain since it was put in play by a thinly veiled takeover attempt last year by EADS, the Franco-German defence and aerospace group best known for its majority stake in Airbus.

EADS’s move was scuppered in part by German resistance to the creation of a French-centred aerospace giant, but also by opposition from Britain’s Ministry of Defence.

Thales is a key player in several big British programmes, including the construction of two new aircraft carriers for the Royal Navy, the provision of surveillance drones for the army, and a new high-tech fighting system for the infantry.

It employs 10,000 people at sites all over Britain, having gained a strong presence after buying the defence-electronics business of Racal.

Alcatel already holds 9.5% of Thales, making it the second-largest shareholder.

Last week Alcatel chief executive Serge Tchuruk told a conference in Tunisia that the French state needed to end the uncertainty over the defence company’s future. “It is very urgent that the state announces its intentions,” said Tchuruk. “The workforce at Thales can’t be left in a permanent state of uncertainty.”

A move by Alcatel is likely to trigger a counter-offer from EADS, but defence-industry sources said the key to the situation was the attitude of the French government.

One senior banker said: “The state’s large shareholding means that it is the kingmaker in this. It could accept an all-French solution in the shape of Alcatel, or it could try to broker a deal in which Alcatel and EADS divided Thales between them.” oEmirates is expected to place a multi-billion-dollar order for up to 26 Boeing 777 airliners at the Dubai Air Show this week. Airline industry sources said the Gulf airline could also make an important order for either Boeing’s new 787 mid-sized jet or the rival Airbus A350. Airbus will display its A380 superjumbo in Emirates colours at the show.