Eurofighter flies to BAE's rescue as £13bn contract is sealed

BAE Systems will this week give the City a much-needed fillip by announcing a multi-billion-pound order for the Eurofighter-Typhoon combat jet.

BAE Systems will this week give the City a much-needed fillip by announcing a multi-billion-pound order for the Eurofighter-Typhoon combat jet.

Britain's largest defence company, which last week warned of dwindling profit margins, will announce that contracts have been signed for 236 new jets.

The Eurofighter-Typhoon has been jointly developed by BAE, the Franco-German defence company EADS, and Italy's Finmeccanica. The new £13bn contract is with the governments of the UK, Italy, Germany and Spain. Of the total order, the Royal Air Force will take 89 jets adding to an earlier order of 55.

The official contract for the jets is expected to be signed between the four countries early this week.

The news will mark the end to a difficult chapter for the Eurofighter-Typhoon, a1980s project dogged by cost overruns and delays. Problems associated with it have become a regular feature of the annual National Audit Office report into the performance of Ministry of Defence weapons procurement.

The order news will come at a good time for BAE, whose shares were hammered after a thinly veiled profits warning on Monday. A cloud is also hanging over the company because of the Serious Fraud Office investigation into kickback allegations on a Saudi contract.