BRITAIN may consider buying up to 150 French fighter jets for two new-generation aircraft carriers scheduled to go into service with the Royal Navy in 2013.
If the Government went ahead with the £5bn deal, it would mean cancelling existing US contracts to supply aircraft for the carriers and could cause a major crisis in Anglo-American relations.
The unexpected verbal offer to buy the Rafale Marine jets came on January 24 when Defence Secretary John Reid met his opposite number, Michele Alliot-Marie, for crucial talks in London.
It followed well publicised difficulties between Britain and America on the Joint Strike Fighter (JSF) project, dogged by a row over sharing technology.
It is understood that Reid said he would consider the French offer. Even agreeing to give the proposal serious consideration could be seen as a major snub to the Americans, whose relations with the French on defence are strained.
The French offer follows America's continued refusal to agree to the transfer of advanced technology on the JSF - the jet being built in the US by Lockheed Martin with co-operation from Britain.
The Ministry of Defence has already paid the Americans £2bn for development. BAE Systems, Britain's leading defence contractor, which is a vital partner in the project, was hoping for about £14bn in development and production contracts.
The MoD declined to give details of the French offer, but defence sources in Paris confirmed that a lengthy conversation took place.
The American refusal to share technology means that if one of the JSFs needed repairs, the work would have to be carried out in America.
It would also mean British forces would not have the right codes to arm the planes if they wanted to use them for missions not approved by the Pentagon.
There is growing anger at the Americans' obduracy over technology transfer. Britain has now made it clear that without 'achieving the appropriate level of sovereignty' over the JSF, it will consider cancelling the contract.
Washington's reluctance to give up the technology to its closest military ally is fuelled by fears that Britain might allow foreign firms access to America's most precious commercial and defence secrets.
Faced by the the refusal to share technology, Lord Grayson, Minister for Defence Procurement, said: 'There has to be a Plan B. We need to make sure we have done the work needed to ensure we have an option.'
The MoD still hopes that the Americans will change their minds. Meanwhile, it is looking at its options. Giving consideration to the French offer could strengthen the MoD's negotiating hand with Washington.
The 60,000-tonne carriers planned for the Royal Navy are designed to have powerful catapults built into the deck. This means they are not restricted to the vertical take-off version of the JSF. They could fire conventional take-off JSFs as well as modified Typhoon Eurofighters.
The Rafale Marine is already in service and is designed for use on France's new carrier - identical to those being built for the Royal Navy.
The decision by Paris to buy the design of the UK carriers for their own second large carrier makes the French option more palatable.
The French jets cost about £35 million each and would be cheaper, if probably unpopular, with the forces.
Gerald Howarth, Conservative defence spokesman, said: 'This shows the danger of the American refusal to give us the technology. They could drive us into the arms of the French.'