BAE Systems faced investor worries over its growth prospects after the United Arab Emirates pulled out of talks to buy 60 Eurofighter Typhoon combat jets, in a blow to the UK government which had pushed hard to land the $9.8 billion deal.

The decision could boost the prospects of French firm Dassault Aviation, which sells the rival Rafale plane, although that firm has also suffered setbacks in a long-running and unpredictable UAE fighter contest.

The Eurofighter snub punctures Britain’s hopes of a deal underpinning thousands of jobs after British prime minister David Cameron travelled to the UAE last month to lobby for the Eurofighter Typhoon contract, which BAE had said could be a “major game-changer”.

Shares in Europe’s biggest defence firm fell 4.8 per cent. – (Reuters)