The British government has said it would loan Airbus £340 million (€394 million) to develop the A350 long-haul passenger plane set for launch in 2013.

The government said the move would create and sustain more than 1,200 jobs at Airbus's British plants as well as over 5,000 positions within the supply chain across Britain.

"We welcome the UK government's decision to invest in the A350 XWB," Airbus president Tom Enders said in a joint statement with the government.

"This partnership with the UK government means that the UK taxpayer can expect a sound return on their investment," he added.

Airbus, a division of the European aerospace giant EADS, intends to launch the A350 as a rival to Boeing's 787, which is planned to come onto the market in 2009.

Britain's Business Secretary Peter Mandelson described the announcement as "excellent news for the UK aerospace sector and for the thousands of British workers within Airbus and its UK-based supply chain".

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.