The Memorandum of Understanding applies to the current UK programmer for the future provision of replacement tanker aircraft, as well as existing programmers in the United States, Japan, and Italy. The M.O.U. also applies to all future programmers globally and potential growth into other large platforms. Both Bae Systems and the company are part of TTSC, the Tanker Team.

The Chief Executive, Bae Systems said, "The bid put forward by TTSC will deliver the best capability for the UK forces, in terms of interoperability and flexibility of usage in concert with the US, as well as securing jobs, skills, and work for many years to come."

"The global market has already overwhelmingly made its decision with the company 767 having been selected by the United States, Japan and Italy. This is why B.A.E. Systems decided to team with the company to the benefit of the UK's defense industrial base. Today's M.O.U. will therefore deliver very long term substantial benefits if the UK now selects the Boeing aircraft."

The President and CEO of the company Integrated Defense Systems commented: "A significant market for tankers exists world-wide. We are excited about making Britain's aerospace industry part of our global tanker team. Today's announcement is firm evidence of Boeing's commitment to the UK and support of high value engineering jobs, as well as the companies close working relationship with BAE Systems."

US Secretary of Defense is blocking a lease-buy deal for 100 Boeing tankers while he examines the circumstances surrounding misconduct charges that prompted Boeing last week to fire two executives, including one close to the deal.

The review is the latest crisis to challenge the legitimacy of the US Air Force's two-year-old attempt to acquire the KC-767 tanker fleet, and came just as The President signed the budget law in November that finally authorized the deal. The dismissals of chief financial officer and former air force acquisition chief in November also triggered calls for a wider review of the service's procurement decisions.

The company says they were fired for talking to someone about future employment while he/ she was still the air force's top acquisition official and the Pentagon's representative in contract talks for the tanker deal. They have denied this and Boeing's claim that he tried to cover up his actions.

The question of whether they improperly tipped off the company on Airbus pricing data, meanwhile, remains the target of a criminal investigation by the Pentagon's inspector general. Those allegations stemmed from internal emails obtained and released in late August by a Senator, an ardent opponent of the deal.

The company says there are no links between the misconduct charges and the tanker negotiations. The review, however, means a fresh round of scrutiny that may still imperil the project.

Says The US Secretary of Defense: "We have just read that two people have been relieved of their responsibilities by a company that we had engaged in an understanding with, and that it struck me, at least, that responsible people would want to say to themselves: "Well, what might that mean for the department? Did something happen?"

A spokesman for the anti-tanker lease Taxpayers for Common Sense admits that the potential effects of the new review are unclear, but the misconduct charges alone should at least "deter any new gerrymandering or shenanigans" on the deal.

The charges also may cast a new light on their 10-year tenure as the air force's top acquisition official. They had gained a reputation as a prickly combatant of defense contractors, more than once publicly calling out a contractor's misdeeds. But they also supported two controversial proposals that offered big rewards for the company - the tanker lease and a defeated attempt in 2000 to label the C-17 as a commercial item.