Britain chose on Tuesday French defense electronics group Thales as its preferred candidate to produce reconnaissance planes for its Ministry of Defense worth 800 million pounds or 1.472 billion US dollars.

British Defense Secretary Geoff Hoon made the announcement at a press conference on the second day of the Farnborough Air Show near London.

"We'll start negotiations (with Thales) immediately and the contract will only be let once these have been successfully concluded," Hoon told reporters.

"The letting of this contract worth several hundred million pounds will depend on the successful completion of these negotiations," he added.

He said the Ministry of Defense had preferred Tahles' proposals to a bid from a consortium headed by US firm Northrop Grumen.

The Thales-led group includes Britain's LogicaCMG, Vega Group and Marshall SV. British firm BAE System was part of the Northrop bid.

The government expects the contract to be signed before the end of 2004, Hoon said.