Airbus will invest more than €400 million (£358.9 million) in the UK in the next 12 months as it prepares to start production on its latest aircraft, the A350XWB.

The aerospace giant has started work on constructing a 46,000 sq m factory at its site in Broughton, North Wales, and is recruiting suppliers to the project. The new facility will build the A350’s wings and help to secure 10,500 jobs in Britain for the next decade.

The Broughton factory will begin its assembly of the first wing this time next year. The aircraft is scheduled to make its first flight in 2012.

About a quarter of the A350’s estimated development budget of €11 billion will be spent in the UK. The project is predicted to become a key export earner once the aircraft enters service in 2013. Airbus has already taken more than 500 orders for the A350, which could be worth more than $20 billion to the British economy.

The aircraft is a revolutionary step for Airbus, because more than 50 per cent will be made from composite materials, such as carbon fibre, which will help to reduce fuel consumption by about 25 per cent compared with existing aircraft.

The stakes are high, too. The A350 will go head-to-head with Boeing’s popular 787 Dreamliner in the mid-sized aircraft market, which is expected to be worth hundreds of billions of dollars in the decades to come. Boeing has a head start with the 787, which is expected to make its first flight by the end of this year, although the project is running two years late.

Airbus factories at Broughton and Filton, near Bristol, have designed and built all wings for the company’s aircraft. Its operations support more than 2,000 suppliers and 135,000 UK jobs. However, Spain, Germany and France, the other Airbus partner countries, had hoped to win more work on the A350 and had lobbied for the wings to be made outside the UK.

Brian Fleet, head of the wing programme, said that the British operations had to fight to maintain wing production in the UK and had committed to efficiency improvements that will cut the cost of each wing by about 30 per cent.

The Government has also committed £340 million in repayable launch aid to the A350 to ensure that wing work is maintained in the UK.

“Broughton is the largest single manufacturing site in the UK and we have to protect that,” Mr Fleet told The Times. “The Government has now realised that it has to champion and nurture its manufacturing base and the aerospace industry has been one of the great success stories. Our supply chain, for example, supports more jobs and generates more revenue than Jaguar Land Rover.”

Airbus splits its operations into wing assembly at Broughton and design and engineering at Filton. Once assembled, the wings are transported in a specially converted aircraft to Toulouse, France, or Hamburg, Germany, to be attached to fuselages.

Broughton also makes the wings for the A380 superjumbo, but these are so large that they have to be transported by barge and then on a specially modified ferry to France.

The big challenge for Airbus in the UK will be to retain work in the long term, with many European and other governments willing to contribute large sums to lure high-quality manufacturing jobs to their countries.

British factories have also been vulnerable to the recession, which has forced many airlines to postpone or cancel their new aircraft orders. Mr Fleet said that about 250 people had been given voluntary redundancy or early retirement from Airbus UK this year. The giant A380 wing assembly building, which is on the other side of the Broughton site from the new A350 building, is producing only one wing a month compared with a capacity of four.