British govt weighs scrapping carrier programme

* BAE asked to look at alternatives to new aircraft carriers

* Defence group chief: One option is to cancel new carriers

By Rhys Jones

LONDON, Sept 8 (Reuters) - British defence firms have been asked by the government to consider scrapping the UK's aircraft carrier programme and are concerned about the new National Security Council's role in decisions on defence spending cuts.

"We are contractually committed (to deliver) two carriers but we have been asked to look at a number of options over the last week," Ian King, BAE Systems' (BAES.L) chief executive, told parliament's defence committee on Wednesday.

Those options include building just one aircraft carrier or none at all and replacing the contract with another defence programme of equivalent value, he added.

A consortium including BAE Systems, Thales (TCFP.PA) and Babcock (BAB.L) has been building two aircraft carriers for Britain at a cost of over 5 billion pounds ($7.7 billion).

A senior defence ministry source told Reuters last month that Britain may cancel one or both of its new aircraft carriers to cut costs. [ID:nLDE67I1I1]

BAE has also been asked to "look at the timing" around replacements for the submarines that carry Trident, Britain's nuclear weapons system which is due to be renewed or replaced by around 2024, King said. Britain is reviewing its defence budget as part of a broader move to cut a record peacetime budget deficit, details of which will be unveiled on Oct. 20.

Analysts believe a review of defence needs will lead to cuts of up to 15 percent in the defence budget -- 36.9 billion pounds for the current financial year -- with big procurement programmes set to be scaled back.

BAE's King told the committee he was worried about the role being played by Britain's new National Security Council (NSC) in making decisions on cuts to defence spending.

The NSC was set up in May by the new coalition government to coordinate the efforts of government departments and agencies to safeguard British security. The body is made up of senior ministers, military chiefs and the heads of the secret service.

"Our engagement is with the Ministry of Defence, we don't have any official engagement with the National Security Council," said King. He answered "yes" when asked if he was concerned that a new body was playing such an important role in making decisions on defence spending.

British defence firms are concerned that spending cuts will be made without considering the UK's Defence Industrial Strategy -- a government policy designed to ensure the armed forces are provided with the equipment they require.

"We hope decisions on spending are policy-led," said Sandy Wilson, president and managing director of the British business of U.S. defence contractor General Dynamics (GD.N). "Cuts need to have a strong strategy around them." (Editing by Andrew Roche)