Britain confirms order for two aircraft carriers

Britain said on Tuesday it was set to sign a long-awaited 4 billion pound ($7.8 billion) deal to build two aircraft carriers, which will be the Royal Navy's largest ever ships and are set for 50 years of service.

"Today's confirmation that we are proceeding with the two aircraft carriers underlines our commitment to both the Royal Navy and the UK shipbuilding industry," Minister for Defence Equipment and Support, Ann Taylor, said.

The 65,000-tonne carriers, due to be called Queen Elizabeth and Prince of Wales and enter service in 2014 and 2016, are expected to each carry 36 F-35 Joint Strike Fighter combat jets as well as four early warning aircraft.

The manufacturing contract is going to a consortium that includes a shipbuilding joint venture to be set up between British companies BAE Systems Plc and VT Group Plc. Final signing of the contract had been expected earlier this year but was delayed as Britain's defence ministry struggled to line up its spending plans with its budget.

BAE, Europe's largest defence contractor, and support services company VT have long been ready to finalise their joint venture, but would not do so until the government said it was ready to put pen to paper on the carrier contract.

"VT and BAE Systems will now finalise arrangements for the joint venture combining their shipbuilding and naval support businesses, following the framework agreement signed in July 2007,"

VT said in a statement. "When the joint venture is formed, (it) will enable the Ministry of Defence and industry to sign the contract for the two new aircraft carriers,"

First Sea Lord and Chief of the Naval Staff Admiral Jonathon Band said. Taylor said the aircraft carriers would sustain around 10,000 jobs at the peak of production". The joint venture between the two largest UK shipbuilders, under which VT has an option to sell its stake to BAE, is key to VT's attempts to be entirely focused on support services.