Airbus rescue deal is finally taking off

European nations gave formal backing to a €3.5 billion (£3bn) rescue deal for Airbus's A400M military aircraft yesterday, ending a drawn-out battle to save the continent's largest defence project.

The bailout from seven Nato nations, including the UK, was the result of an intense political battle to prevent the original €20bn project collapsing under the weight of cost overruns and delays with the loss of 10,000 jobs. In Britain, the A400M will replace the RAF's ageing C-130 Hercules transport fleet.

The project for the aircraft, built in Seville, will support 40,000 jobs in Europe by 2016, with the first planes delivered to the French air force by early 2013.

Domingo Urena, chief executive of Airbus Military, said: "From an industrial point of view, the programme is on track."