BAE Systems has warned the Government of the consequences of axing major programmes such as Trident or the Eurofighter Typhoon.

The defence industry is concerned that the Government will use big projects as an opportunity to rein in spending after pumping billions of pounds into the economy this year and next. Possible targets for cuts include the £20 billion Trident nuclear deterrent replacement, the £4 billion aircraft carrier project and a third tranche of Eurofighter Typhoons, which will cost about £2 billion.

In his first formal interview since taking over as chief executive of BAE last October, Ian King said: “We have to invest in skills and apprentices but we require medium-term stability to do so. We have said to the Government that if you cut back that will affect our decisions in the short term and that will flow through to the supply chain.”

Mr King has discussed his concerns with the Prime Minister and other ministers in recent weeks as part of the Government’s wider discussions with companies on how to deal with the economic crisis.

Mr King said that it would be difficult for BAE to continue to invest in more apprentices and engineers if future projects were under threat. That would also affect the company’s thousands of small and medium-sized suppliers, potentially leading to job losses and factory closures.

BAE employs 34,000 people in the UK and is the single largest employer of engineers and apprentices.

All three of the big projects that will secure these jobs in the next decade are controversial and have been linked in the past to budget cuts. The replacement for Trident, for example, was criticised by three former defence chiefs in a letter to The Times yesterday. They said the deterrent was no longer independent and questions had to be asked about its necessity.

Army chiefs are also understood to be angry at the proposed £4 billion aircraft carrier project.

BAE’s list of current major programmes also includes the Astute class nuclear submarine.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax