The US Air Force has handed European defence company EADS a $40bn (£20.1bn) contract for aerial refuelling tankers in a stunning defeat for Boeing. The decision has already sparked a political backlash against putting a critical military contract partly into the hands of a foreign company.

The contract, one of the largest at the Pentagon, is initially valued at $40bn (£20.1bn) but has the potential to grow to $100 billion. Boeing had built the bulk of the existing refuelling tanker fleet for decades, but in 2003 Congress cancelled the company’s last tanker deal following a procurement scandal that sent a Boeing executive and air force procurement official to prison.

Louis Gallois, chief executive of EADS, said: “This major selection is a win-win for our customers, for allied industrial cooperation and for EADS. It signals a quantum-leap forward in our commitment to the US defence customer, reflects and supports our global strategy to increase EADS’s industrial presence in key markets and our goal to balance the company’s defence and commercial portfolios.”

Under the contract, EADS and Northrop Grumann, its US partner, will build a fleet of 179 planes, based on the existing Airbus 330, to provide in-air refuelling to military aircraft. Parts would come from suppliers across the globe but final assembly of the craft would take place at an Airbus plant near Mobile, Alabama.

Responding to questions at a news conference about possible negative political reaction to the deal, General Arthur Lichte, head of the air force’s Air Mobility Command, said: “This will be an American tanker, flown by American airmen with an American flag on its tail and, every day, it will be saving American lives.”

Reaction from opponents in Congress, however, was swift.

"We will be asking tough questions about the decision to outsource this contract," a group of politicians from Washington State said in a joint statement. Boeing planes are assembled outside of Seattle, Washington.

"At a time when our economy is hurting, this is a blow not only to our state, but more than 40 states across the country who would help build this national plane."

“Obviously we are very disappointed,” Boeing said in a statement. “Once we have reviewed the details behind the award, we will make a decision concerning our possible options.”

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