‘All-British’ fighter jet will use American engine amid bitter military dispute

The Brontanax, revealed last week and billed as an "all-British" unmanned fighter, is the only domestically produced contender for the RAF's "loyal wingman" programme, where drones fly alongside crewed jets for added protection.

More than 70 UK companies are backing BAE in building a demonstrator aircraft.

Yet Rolls-Royce, long regarded as a cornerstone of British military aviation, has been excluded from the project.

The engine maker was judged not to have fully committed to the venture, and its proposed power unit was considered too costly by BAE, a person linked to the private discussions told The Telegraph.

Instead, BAE has opted for a power system from Williams International, an American manufacturer, on the grounds that it offers better value for money.

Rolls-Royce had developed a compact demonstrator engine called Orpheus, which it hopes to sell to armed forces worldwide for use in loyal wingman drones.

BAE's newly revealed unmanned fighter aircraft Brontanax was unveiled last week

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However, during negotiations over the Brontanax, the company was perceived as failing to "lean in" sufficiently to the effort.

The outcome means Rolls is contributing to drone programmes in the United States and Germany but is shut out of Britain's own flagship project.

This row has emerged alongside a separate dispute between Rolls and the Government over state funding for a new short-haul aircraft engine, with the company threatening to shift that work to Germany if support is not provided.

Rolls-Royce chief executive Tufan Erginbilgic told The Telegraph his firm was "absolutely" capable of powering drones like the Brontanax.

Charles Woodburn and Wes Streeting attended the unveiling of the fighter aircraft last week

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Asked why Rolls was absent from the "best of British" demonstrator, he replied: "You should ask BAE that, but it's a demonstrator."

He added: "I expect these two great companies to work on this. How we ended up here, I don't want to speculate. But going forward, that opportunity definitely exists."

Meanwhile, independent defence analyst Francis Tusa said Rolls had "overplayed its hand" and urged ministers to "knock heads together".

He added: "Of course Rolls has got a duty to its shareholders, but this is a project of national importance. If they are quibbling over returns they should, frankly, wind their necks in."

"We love to buy British wherever we can," BAE's chief executive Charles Woodburn said.

The Ministry of Defence outlined in its Defence Investment Plan that it wants "a sovereign, world-leading propulsion system" for the RAF's unmanned aircraft, while ministers have pledged to "buy British" where they can.

Rolls-Royce is one of only two European firms, alongside France's Safran, believed to possess the technical expertise needed to build such an engine.

BAE has already invested millions in the Brontanax and is promoting it as delivering 70 to 80 per cent of a Typhoon's capability at a quarter of the cost.

Dave Holmes of BAE's FalconWorks division said at Farnborough that the two companies were collaborating to "upscale" the Orpheus to "meet not only the thrust requirements, but also the price point".