Two new aircraft carriers may have to be smaller than planned after BAE Systems reportedly warned it could not build the designs to budget.
Reports said the Ministry of Defence had been told the project would cost up to £4 billion, rather than the £2.8 billion originally forecast.
That could result in the Royal Navy having to accept smaller and less sophisticated ships.
Both BAE Systems and the MoD stressed the project was still at its assessment phase, expected to last until next spring.
The ships are due to come into service from 2012.
An MoD spokesman said: "We are confident that the carriers will be able to meet the requirements of the strategic defence review."
Tuesday July 16, 2003
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