Failure to reach an agreement over the next tranche of funding for Eurofighter, Europe’s biggest defence project, could cost up to EUR2bn (pounds 1.3bn) as well as thousands of jobs, according to executives involved with the scheme.

A deadline for securing a new round of funding from the four countries behind Eurofighter - the UK, Germany, Italy and Spain - is currently set for the end of this month. But the UK is believed to be holding up an agreement over concerns that the price of the project is again rising too high. Speaking at the weekend, Tom Enders, the chief executive of EADS - one of the three main manufacturers involved - said a disruption of the EUR83bn programme because of funding problems posed a “serious threat” with thousands of jobs at risk.

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Meanwhile, Boeing has redoubled its attack on the subsidies received by its European rival Airbus, saying the 1992 accord governing support for large commercial aircraft programmes should be scrapped and replaced by a new bilateral agreement. Alan Mulally, the president of Boeing’s commercial aeroplane division, said the accord had not been complied with and had failed in its purpose, which was to phase out state aid.