Lord Gilbert said, "The UK has been considering a range of procurement options for meeting our SKYNET 5 requirement for future military satellite communications. We have been keen to investigate the scope for collaboration with our allies on this important new programme. For some time this was our preferred option.

"However, we have now completed our evaluation of a range of industrial proposals, including both collaborative and national options. It unfortunately appears that, crucially, we will be unable to rely with assurance on collaborative processes being able to meet the UK's needs with respect to an In Service Date before our existing satellites go out of service.

"We remain strong supporters of collaboration in the field of equipment procurement and a decision not to pursue a major programme like this is not taken lightly. We will continue to work alongside France and Germany in the new European armaments agency, OCCAR, as well as on a wide range of existing programmes, and will be exploring other potential collaborative programmes in future."

The United Kingdom, France and Germany signed a Memorandum of Understanding in December 1997 following which two tri-national consortia, led by Alcatel and Matra-Marconi Space, submitted bids for Project Definition work. In parallel, the United Kingdom sought and received Project Definition bids for a national programme from Matra- Marconi Space and from British Aerospace, teamed with Lockheed Martin.