BAE SYSTEMS was celebrating the first big export order for the Eurofighter last night after Britain and Saudi Arabia signed a memorandum of understanding that could secure £10 billion of work for the British firm and its sub-contractors.

It is thought that up to 72 Typhoon jets will be delivered to the kingdom from 2008, but neither government would confirm the size of the order.

The agreement to replace British-made Tornados and other jets with Eurofighter Typhoons is seen as a significant breakthrough for the Eurofighter, which so far has been sold only to the air forces of the home manufacturing countries — Britain, Germany, Italy and Spain — and Austria.

The huge order, which has been under negotiation for most of this year, is seen as confirmation that the jet can sell around the world. There had been fears that Eurofighter work could dry up in the next few years as a long-planned third tranche has yet to be finally confirmed. President Chirac of France has also been lobbying hard to try to persuade Saudi Arabia to buy the French-built Rafael jet.

The Ministry of Defence said that the partnership recognised actions by both governments to “combat global terrorism” and would safeguard thousands of jobs over the next ten years in the UK, where BAE Systems builds the Eurofighter.

Shares in BAE soared to a three-year high yesterday, closing more than 6 per cent up at 369½p, after the accord was confirmed.

The agreement will also secure 4,000 jobs at Rolls-Royce, which supplies the engines for the jet, and will help to underpin thousands of jobs in companies that supply parts to the jets, including Cobham, Ultra Electronics, EADS, Meggitt and Smiths.

Colin Green, defence aerospace president at Rolls-Royce, said: “This will mean a lot to everyone associated with the Eurofighter and will go far to confirm its real potential in the global market.”

The first 24 jets to be delivered to the Royal Saudi Air Force will be diverted from an allocation of 89 that had been assigned to the Royal Air Force from the second tranche of the programme. The MoD said that the decision to divert aircraft from the RAF would have no impact on operations.

BAE said in a statement that it welcomed the announcement. Under the agreement, BAE will provide so-called through-life service for the aircraft, as well as training and support to the Saudi Air Force. The company will invest in Saudi companies and transfer some technological expertise to Saudi firms, so that Saudi nationals undertake more of the service work.

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