Talks between defence giant BAE Systems and the Ministry of Defence about developing a "technical demonstrator" version of an unmanned 'spy' plane are expected to be completed with the signing of a £200m deal next month.

Today, local MP David Borrow, a member of the parliamentary defence committee, confirmed there had been "advanced discussions" between the Ministry of Defence and BAE about the future of unmanned air vehicles (UAVs).

He added that it would come as "no surprise" if there was an announcement in the next fortnight giving BAE the green light to push ahead with its UAVs programme.

In September, BAE Air Systems managing director Nigel Whitehead, who oversees the 9,000-strong workforce at Warton and Samlesbury, near Preston, said UAV contracts would provide job security on the sites when current programmes such as Eurofighter Typhoon and the Joint Strike Fighter (JSF) are complete.

He also confirmed talks were under way to building a "more substantial demonstrator programme" for UAVs – that is, a fully-functioning prototype.

Mr Borrow, who represents South Ribble in the House of Commons, said: "After JSF, the assumption is there will be a big increase in the importance of UAVs both on the military and civilian side of things, and the level of investment in that area of manufacturing is already increasing.

"It would be no surprise if the discussions that are ongoing between BAE and the government reached a positive conclusion sometime soon."

Fylde MP Michael Jack, who represents the thousands of workers at Warton, described the imminent deal as "the dawn of a new age" of production at the site.

Mr Jack added: "This would put Britain into a position to develop its own UAV fleet in the future which would not be dependant on the technology of others at a time when these developments will lead the way in civil and military
aviation.

"But, the most important thing is that it will keep the highly-skilled teams of designers and engineers at Warton together to create the future of the company."

The contract, believed to be worth between £175m and £200m, would be the largest experimental project financed by the MoD since experimental aircraft programme, the forerunner for the Eurofighter Typhoon, developed by BAE in the 1980s.

A spokesman for BAE said: "It is premature to speculate on a MoD contract of this type, but BAE has demonstrated its capability in the area of UAVs and hope to be well-placed to play its part in any future programme."