THERE were fresh fears this week that a contract to build a fleet of helicopters for the US president will be scrapped, putting jobs in Yeovil at risk.

The US Secretary of Defence Robert Gates announced on Monday that he wanted to cancel the deal for the helicopters, called Marine One when carrying the president and designed to operate as an Oval Office in the sky, because the cost of the 23 aircraft had doubled to £7.4B.

A spokesman for AgustaWestland said yesterday that it was now down to US Congress to make the decision, which is likely to be in the autumn. He said it was too early to speculate on possible job losses.

The contract, awarded to AgustaWestland in January 2005, was credited with saving hundreds of jobs in Yeovil and gave the company the kudos of producing the world's most technologically advanced helicopter.

It is designed to safely and reliably transport the US president and vice-president, heads of state and other official parties both at home and abroad.

The contract is split into two phases, the first for nine helicopters and the second for 23. As the principal sub-contractor to Lockheed Martin, AgustaWestland has responsibility for the basic air vehicle design, production build, and basic air vehicle support functions.

But its cost has soared, triggering an automatic review under American procurement law.

A spokesman for AgustaWestland said from a Yeovil point of view, the first phase is almost complete. They have so far delivered eight of the nine aircraft with the final one due to be handed over later this month.

He said: "The situation at the moment is that all these recommendations will get discussed and ultimately US Congress will decide what happens. That process will probably conclude in the autumn.

"There has been very little work going on with regards to phase two. The in-service date for these is scheduled for 2017. There is a lot of development and testing to be done and that part of it is on hold until while we wait and see what decision Congress makes.

"Ultimately if it is cancelled, it is clearly not good news but the phase one has virtually been completed from an AgustaWestland point of view.

"Increment two is a large contract but it is spread over a long period.

"We will not speculate on what impact it might have on jobs. A lot of things can happen and change between now and 2017 and we have orders from other customers we expect to win and more new order but we don't want to speculate.

"In reality having the Defence Secretary recommend it should be cancelled is not good news, but it is not a final decision. Some things will change and on Monday he referred to a whole range of programmes."

The spokesman said they had no prior knowledge of the announcement before Monday.

He said: "It has always been one of those programmes that has been speculated about. It is a large contract and in the current climate any large programme could be potentially cut or cancelled. You always know with these that they are never 100 per cent certain."

Senior defence analysts have said that the loss of this contract could make it difficult for the company to sustain its 3,800 workforce without new orders.

Howard Wheeldon, senior strategist at BGC Partners and a respected defence commentator, said: "This is a serious blow to Westland and the impact will be greater than the company is willing to admit."

Mr Gates also announced he has cancelled another project that AgustaWestland had hoped to win – it was competing against Boeing and Sikorsky to supply search-and-rescue helicopters for the $15B CSAR-X programme.

Among other projects that Mr Gates wants to scrap are the F22, the world's most sophisticated fighter jet, and the C17, a transport aircraft. The Pentagon's Future Combat Systems (FCS) project, an electronic warfare platform for armoured vehicles and troops, would also be curtailed.