LONDON (AFP) - Discussions on Britain's 13-billion-pound (24 billion dollars, 18.8 billion euros) air tanker deal with a consortium led by the European Aeronautic Defence and Space company (EADS) has seen "substantial elements" agreed since September, a source familiar with the matter said.
They added that a deal could even be agreed as soon as late December but would be near certain to come within "the next couple of months."
The source said letters cited by the Financial Times on Wednesday to the effect that Peter Spencer, procurement officer at the British defence ministry, had ordered "fall-back studies" for an alternative to the EADS deal were two months old.
"Things have moved on dramatically since then, and substantial elements of the contract have been agreed," the source said, although cautioning that there were still some sticking points.
The Financial Times identified one key sticking point as an insistence by EADS unit AirTanker that the ministry assume the full design and construction risks.
But the source said that disagreement had been resolved, with AirTanker agreeing to shoulder part of those risks.
The Royal Air Force contract is central to an effort by EADS to enter the military air tanker market with its Airbus range. The promise of a British contract was the first for the A330 as a tanker.
Contacted Wednesday by AFX News, AFP's financial news unit, a spokesman for EADS said the company believes the tenor of recent press comments does not accurately reflect the true state of negotiations.
"We're actively engaged on a daily basis with the customer during the ongoing negotiation phase and working together with them.
"Progress is being made, and we're confident and optimistic about the proposal and concluding a successful deal," he said.
11/03/2004 - 14:59 GMT - AFP