LONDON — Britain’s defense secretary has revealed the government held discussions with Boeing over the purchase of a fleet of Wedgetail E-7 airborne warning and control aircraft. Discussions are also taking place with Australia about cooperating in the use of the aircraft, Gavin Williamson said.

Williamson said the Ministry of Defence had undertaken market analysis and discussions with other potential providers, concluding “that the potential procurement of the E-7 represents the best value for money option for the U.K. against need, whilst representing a significant opportunity for increased defense cooperation and collaboration with our key ally Australia.”

“The Wedgetail is the stand-out performer in our pursuit of a new battlespace surveillance aircraft, and has already proved itself in Iraq and Syria,” Williamson said.

The MoD said in a statement that further discussions are set to take place prior to an investment decision.

“If selected, U.K. industry could be involved significantly with the program, from modification work to through life support,” the MoD said.

Said Williamson: “The MoD will work closely with Boeing to ensure [exploration of] how Britain’s leading defense industry could also benefit from any deal.”

One company expected to benefit from any E-7 deal is the Marshall Aerospace and Defence Group.

Marshall already builds auxiliary fuel tanks for the Poseidon P-8 maritime patrol aircraft program, and industry sources say the Cambridge, England-based company is set to convert 737 aircraft to the Wedgetail configuration as part of the deal.

The talks with Boeing about raising U.K. content on the aircraft are an effort to head off likely criticism over handing yet another major contract to the U.S. defense giant without holding a competition and with little in the way of work coming to local industry.

Boeing Apache attack helicopters and Poseidon P-8 maritime patrol aircraft have both recently been purchased without a competition.

The U.S. contractor is, however, trying to nullify criticism over growing its workforce here to 2,300 and spending a sizable sum of cash building Poseidon support facilities at the aircraft’s main Royal Air Force operating base at Lossiemouth, Scotland.

“We work with our U.K. supply chain, government and military partners to provide critical capability, U.K. content, U.K. exports, skills and value for money to our armed forces,” a Boeing spokesperson said.

The intention to undertake two large, sole-source deals in the armored vehicle sector U.S. and German companies have fueled anger from a number of British defense companies over the country’s procurement policy.

Any British Wedgetail deal would be done with Boeing and not through the U.S. government’s Foreign Military Sales route.

Williamson did not provide details on cost and aircraft numbers, but up to six aircraft are expected to be procured to replace the Royal Air Force’s aged Sentry E-3D fleet. The cost is likely to be in excess of £2 billion (U.S. $2.6 billion), putting more pressure on Britain’s overcommitted defense budget.

The likelihood of Wedgetail being purchased as a single-source procurement has provoked anger among potential rivals like Airbus and Saab. The two European companies discussed joining forces earlier this year in a move to offer a credible and cheaper option to the Wedgetail.

In June, parliamentary Defence Committee Chairman Julian Lewis wrote an open letter to then-Defence Procurement Minister Guto Bebb, urging him to hold a competition to replace the Sentry E-3Ds.

Williamson’s announcement is also notable for the increasing depth of cooperation emerging between Britain and Australia.

Australia already operates a fleet of Wedgetails, and a small number of British Royal Air Force personnel have been training on the aircraft since mid-year.

“Our future with Australia will already see us operate the same maritime patrol aircraft [the P-8], Type 26 warships and F-35 jets. Wedgetail may join that formidable armory and help us work together to take on the global threats that we both face,” Williamson said.