European planemaker EADS is reportedly preparing to pull out from Europe’s largest defence project – the A400M military transport aircraft.
The inaugural flight last month was two years behind schedule as a result of delays in engine software development and other hitches which have seen production costs soar.
Now EADS chief executive, Thomas Enders, is said to be anxious that the failure so far to agree a budget could have a negative impact on its civil aviation business.
Talks have been ongoing for months with a group of seven European NATO buyers over extra payments of 5 billion euros, according to negotiators.
However, Germany has ruled out making design concessions for the project which was expected to cost 20 billion euros.
A decision to cancel the programme could put 40,000 mainly hi-tech European jobs at risk.
But that seems unlikely as NATO says the troop and equipment plane is urgently needed to support operations in areas such as Afghanistan.