FIVE hundred jobs will be created by BAE Systems in the next year as a direct result of the massive £280billion deal won by American aerospace giant Lockheed Martin.

Employees at BAE Systems in Salmesbury and Warton will be involved in the system design and development stage of the joint fighter programme, which is part of Britain's biggest ever military contract and will provide 3,000 aircraft.

Salmesbury will produce the rear fuselage of the jets, which have been ordered by the US Air Force, US Navy and US Marine Corps and the Royal Navy and Royal Air Force.

The extra jobs, in engineering, were announced by BAE today and will be spread across the area's two sites although bosses could not say how many would be based at Salmesbury.

The news comes after a series of redunancies earlier this year.

Managing director Stephen Henwood, group managing director, said: "Those 500 new positions will not necessarily be filled by those people who left.

"We have a rolling programme of engineering recruitment and we are continually looking for graduates and experienced engineers. It is a very important part of refreshing ourselves. We need good engineers to fulfill this contract and we will need more engineers to do that. In the manufacturing area this contract is safeguarding jobs."

Mr Henwood said the contract would also secure jobs linked to the industry across the region.

The firm is also going to invest thousands in modernising some areas of the Salmesbury plant including modifying some of the assembly areas and installing new IT systems. It will also be spending money on training for staff to build the new designs.

The first development shell of the jet is expected to roll off the production line for tests at Salmesbury in 2005, with full production in 2010.

The firm, which already has the jump-jet expertise needed for the contract, faced strong competition from American giants Boeing for the contract.

Head of programmes and chief engineer Mike Raettig said it had been a nail-biting wait for the news.

"We had it beamed to us live by satellite in America on Friday. I didn't know before the announcement came on the screen, whether I was going to have to stand up and congratulate us or commiserate."