ONE major East Lancashire employer has lost out, but another has gained, after a contract to build RAF re-fuelling tankers was handed to a new consortium.

BAE Systems, which employs hundreds of East Lancashire workers at its base in Samlesbury, missed out when the Government awarded the work.

But Rolls Royce, which employs 900 at Barnoldswick, is part of the preferred new consortium.

BAE Systems, Boeing, Serco and Spectrum Capital formed the Tanker Transport Services Company (TTSC) proposing a service using Boeing 767 aircraft to replace the RAF's ageing fleet of VC10 and Tristar planes.

But the Ministry of Defence yesterday announced that AirTanker Limited -- which comprises Rolls Royce, EADS, Cobham and Thales -- was chosen instead to provide a service using Airbus A330 aircraft which uses Rolls-Royce Trent engines.

The fan blades for the Trent engines are manufactured at Rolls-Royce's Barnoldswick factory.

The news is a blow for BAE Systems, recently criticised by the National Audit Office over delays and cost overruns in a number of projects, including the Eurofighter Typhoon.

Now it can only hope that the talks with AirTanker break down, allowing it a second chance.

A BAE Systems spokesman: "None of the production work on the new tanker fleet was scheduled to take place at BAE's Lancashire sites.

"There would have been some work for our Customer Solutions and Support unit at Chorley, involving construction consultancy, but this would have been relatively small.

"The decision is disappointing, but it will not have any significant impact on our North West sites."

Additionally, the Airbus on which the new tanker will be based is owned by a consortium in which BAE has a 20per cent stake.

Some parts are made by BAE at Samlesbury.

Hyndburn MP Greg Pope, said: "Despite BAE Systems losing out there's still some good news as Rolls Royce's factory in Barnoldswick will be contributing to making the Trent engines for the winning consortium.

"It means that we will be helping to retain just the sort of high skill, high value jobs that are vital for the future of East Lancashire."

Ribble Valley Tory MP Nigel Evans said: "I am very concerned about this decision. Its a devastating blow to BAE Systems who have shown themselves to be world leaders in aerospace technology.

"I hope that the Government will be able to give us full information on why they failed to give the contract to a largely British bid which would have secured many jobs in the North West of England."