A multi-billion pound deal backed by the Government to sell Typhoon jets to the United Arab Emirates (UAE) has collapsed, defence contractor BAE Systems has said. Prime Minister David Cameron pressed the case for the deal for 60 jets during a recent visit to the Middle East.
It was reported to be worth around £6 billion and have the potential to support thousands of jobs.
But a thawing in relations between the Gulf states and Iran, their regional rival, is thought to have blunted the appetite for military hardware.
BAE said in a statement: “BAE Systems and the UK Government have been in discussions with the Government of the United Arab Emirates regarding a range of defence and security capabilities including the potential supply of Typhoon aircraft.
“The UAE have advised that they have elected not to proceed with these proposals at this time.”
The group said that “significant effort” had been invested in drawing up the deal and warned it had “not built this prospect into its planning assumptions”.
BAE, which has a major land systems base in Telford unconnected to the aircraft, said it was still in negotiations with Saudi Arabia over a Typhoon deal.
The company added that while good progress had been made, a definitive agreement had yet to be reached for the sale.