BOSSES at British Aerospace have denied they have received an approach to buy its arms-making business Royal Ordnance despite reports that a German company was poised to make a bid for the company.

Germany's Rheinmetall was tipped in newspaper reports to be planning to buy the arms-maker.

But BAe, which recently announced up to 160 job losses at its Blackburn factory, issued a statement saying it had not begun any sale talks.

"We have been in discussions for some time with Rheinmetall about a possible joint venture in the ordnance business," said the statement. "We have not received a formal proposal from Rheinmetall on any different basis."

Royal Ordnance has been a vital supplier to Britain's armed forces for over 400 years and any sale to an overseas company would be likely to spark controversy.

BAe's statement added that it was in discussion with the Ministry of Defence over the future of the arms making operation.

"We are anxious to find a solution that secures the long term future of the Royal Ordnance business," it said.

The arms-making division has faced increasing competition from overseas suppliers but earlier this week BAe dismissed reports that some of the Royal Ordnance factories faced closure.

The speculation comes just weeks after up to 160 job cuts were announced at the Blackburn factory - almost half the workforce.

Talks are still going on about the long term future of the East Lancashire factory.

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