BRITAIN is threatening to pull out of the Joint Strike Fighter (JSF), a co-operative combat-aircraft project with America that is one of the largest military programmes in the world.

The move, confirmed to The Sunday Times by senior defence officials, could have serious repercussions for BAE Systems and Rolls-Royce, Britain’s two main contributors to the project.

BAE is part of the consortium developing the plane, and had expected revenues of about $24 billion (£13.8 billion) in development and production contracts.

Rolls-Royce is developing the lift fan for the vertical take-off version, and is working with its American rival, General Electric, on an alternative engine for the aircraft.

The JSF is a versatile plane aimed at replacing several types of aircraft currently in use, and could achieve total sales of more than $300 billion, according to some forecasts.

While the development is being driven by the Pentagon, it is being built by a multinational team in which Britain is the sole “Tier One” partner. The government has already provided $2 billion in development funding, and had been slated to buy 150 aircraft for the RAF and Royal Navy.

But Britain is now threatening to withdraw after rows over the Pentagon’s reluctance to agree to the transfer of technology, and because of likely increases in the price of each plane.

According to senior Ministry of Defence officials, instructions have been given for alternative strategies for projects affected by American technology- transfer problems, the most important of which is the JSF.

Dropping the JSF would stun the defence industry, but a senior official told The Sunday Times it was time to “think the unthinkable”. “I know how the Americans negotiate,” said the official. “They will not do a deal unless they know the other side has a serious alternative. It’s like a high-stakes poker game . . . it’s essential to have a Plan B because it’s very important not to travel in hope.”

The JSF was to have equipped the Royal Navy’s two new aircraft carriers. The “Plan B” being worked on is a version of the Eurofighter Typhoon adapted for the navy. The Typhoon recently entered service with the RAF after long delays and cost overruns.

Defence-industry sources say negotiations on the “Tranche 3” Eurofighter contract, under which Britain will take the last 88 of the 232 orders, now encompassed the issues needed to be addressed to make the aircraft fly from a carrier.

Sources close to the Eurofighter programme say there are no major obstacles to the operation, although some elements of the carrier design would have to be changed.

BAE Systems is likely to stand behind the government’s tough line on the negotiations with the Americans. The company is eager to secure more defence technology to allow it to play a full role in the JSF programme if it continues.

But Rolls-Royce could be an early casualty. Defence-industry sources in Washington said last week that the US budget row could threaten funding for the F-136 engine that it is developing in conjunction with General Electric.