Government to give go-ahead for £1bn defence helicopter deal

The government is set to approve a £1bn purchase of military helicopters from the UK's only specialist supplier.

Italian company Leonardo's plant in Yeovil, Somerset, had been left in limbo after a planned visit by Defence Secretary John Healey to award the contract was cancelled on Thursday.

But Treasury sources have told the BBC the deal to build a new fleet of defence helicopters will be signed off on Friday, after all.

Leonardo owns Britain's last military helicopter manufacturing site, employing 3,000 workers, and was the only bidder for the contract.

It is understood that the chancellor and prime minister chose to intervene to ensure the project would go ahead, in part to protect UK jobs.

The Chancellor, Rachel Reeves, did not want the deal to collapse on her watch, because security and growth "were fundamentally connected", a Treasury source said.

Leonardo's chief executive, Roberto Cingolani, has previously said the firm's future would be at risk if the deal was not approved.

The government had previously delayed making a decision on the contract.