Airbus, the European aircraft manufacturer, faces the possibility of being broken up after German shareholders and executives were understood to have been discussing the feasibility of the group’s present structure.

The Times understands that there is enormous dissatisfaction on the German side of EADS, the defence company that owns Airbus, and sources close to the company say that the Germans are considering a breakup. Such a move would end an experiment in European co-operation that has built Airbus and EADS into an aerospace giant with more than 110,000 employees, including 17,000 in the UK.

The crisis at Airbus was triggered on Sunday by shareholders refusing to back a restructuring plan submitted by Louis Gallois, the co-chief executive of EADS and head of Airbus. The plan, which was scheduled to be announced today at Airbus headquarters in Toulouse, called for cost-cutting and improved efficiencies in aircraft production.

The Power 8 plan will entail the outsourcing of factories, the rationalisation of the supply chain and possibly thousands of redundancies. Mr Gallois is also trying to tie work on a new aircraft, the A350, into this new, more efficient production regime. This would mean concentrating A350 work at fewer sites rather than spreading construction across Europe, as happens at present.

However, the German Government has balked at receiving less work on the A350 than the French. The present proposals could leave the Germans with only 10 per cent of A350 work, compared with France’s 35 per cent.

Pressure will be on Mr Gallois to water down Power 8 and assign more A350 work to Germany. This could endanger the UK’s role in the A350, which covers about 20 per cent of the €10 billion (£6.7 billion) project. The Airbus factory at Broughton, North Wales, is scheduled to build the wings of the aircraft. However, sources close to Airbus said last night that the Germans were playing a political game with France. These sources believe that the Germans will agree to Power 8 — and giving France the bulk of A350 work — only if they get all A320 production in return. This would effectively split Airbus, with the smaller aircraft made in Germany and the larger ones in France. A formal divorce between the two countries would then be achieved easily.

French Airbus executives were pinning the blame yesterday on German shareholders for the deadlock over Power 8 restructuring. They said that Angela Merkel, the Chancellor, had used the main German shareholder, DaimlerChrysler, to express her opposition to a reorganisation of Airbus’s production model.

Sources in Paris accused Mrs Merkel of playing politics at the expense of Airbus to win praise among the German electorate.

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