UK taxpayers face huge bill as Airbus tears up A350 design

Airbus is preparing to tear up the design of its new A350 plane in favour of a bigger, heavier and more powerful aircraft which could double development costs and leave the UK taxpayer facing a demand for hundreds of millions of pounds more in launch aid. The new plane could cost as much as €8bn (£5.5bn) to develop, compared with the estimated €4bn cost of the A350 and would be at least two years later entering service.

The European plane maker has been forced to go back to the drawing board after the lukewarm response from airline customers to the A350, which has been designed as a competitor to Boeing's 787 Dreamliner. Airbus has won just 100 orders for the A350 compared with 350 for the rival Boeing jet.

The plan now is to redesign the A350 with a wider fuselage, a bigger all-composite wing and more powerful engines with a thrust of up to 90,000lbs. This would have serious implications for the amount of repayable launch aid Airbus is likely to request from Britain and its three other partner governments in France, Germany and Spain.

Subsidy rules allow it to receive one-third of total development costs. So far the UK has agreed to provide Airbus with £380m in launch aid. The figure is high because the all-composite wing, which will be built in Britain, accounts for a bigger proportion of development costs than previous Airbus aircraft. But this figure is likely to go higher still - perhaps requiring the UK taxpayer to provide as much £500m-£600m in support.

An Airbus spokesman said: "A350 sales are doing well but we are obviously listening to customers. We have said we will come back in the summer with the final configuration."

The escalating costs of the A350, together with the expense of developing the military A400M plane, are thought to be partly behind BAE Systems' decision to sell its 20 per cent stake in Airbus to the majority shareholder, Eads. BAE has initiated a "put option" process which kicks in from early June and will give the two sides 30 days to settle on a price unless they make a breakthrough before then.