BAE merger talks continue amid political tensions

Eurofighter Typhoon at BAE Systems Credit: Press Association

Merger talks between Britain's biggest defence company, BAE Systems and Frenco-German company EADS are continuing, despite political interference all round.

The government is seeking reassurances that UK jobs will not be lost, and is waiting for a guarantee that British manufactoring jobs will not be lost before giving the merger its blessing. Economics Editor Richard Edgar reports.

Dr Robin Niblett from Chatham House said the merger was always going to be politically senstive. He said:

BAE and EADS are working to a deadline of 10 October deadline to thrash out a deal.