AEROSPACE giant BAE Systems is set to inject £500million into its main pension fund to help plug a £2.8billion black hole.

Sources at BAE Systems today confirmed reports that the payment, expected to be a mix of cash and assets, was being considered.

BAE Systems, which employs more than 3,500 people at Samlesbury, has offered the payment to aerospace unions and other employee representatives after long-running talks.

The proposal has been welcomed by manufacturing union Amicus, which is heavily involved in the talks.

It is understood that employees are being asked to consider proposals that would reduce benefits for the final salary scheme members.

BAE confirmed that one option being studied would be to cut payouts to workers who take early retirement, while the level of benefits paid to existing pensioners would not be affected.

Richard Coltart, a spokesman for BAE Systems, said: "We are in consultation with employer representatives from the Pension Review Consultative Committee.

"That consultation is ongoing at this stage and will take some time to talk through so it would be unwise to make too much comment at this stage.

"I can confirm that the company is proposing to put in a large amount of capital (to the pension fund) to help reduce the deficit as part of a number of different measures."

A spokesman for Amicus said: "We believe it is a responsible move by BAE Systems who are committed to the final salary scheme.

"It is a measure that in the long term should be beneficial to the pension scheme and its members.

"However, continuing reviews need to be made to make sure the deficit is addressed and Amicus will make sure there is active and useful dialogue with the management at BAE."

The Evening Telegraph revealed last month how workers at BAE faced having to work past retirement age in order to receive their full pension benefits.

Neil Sheehan, works convener at Samlesbury and a representative of the T&G union, said he would comment while talks were ongoing.

Employees at the company increased their pension scheme contributions to over nine per cent in 2002 after the scheme was closed to new members.

But longer life expectancy and poor investment returns meant the deficit remained.

Workers at BAE are still angry that the company has not closed its executive pension scheme, which sees senior executives receive large retirement pay-outs on top of what they receive under the final salary scheme.