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Navy carrier costs 'to be agreed'

The final cost of the Royal Navy's two new aircraft carriers will not be known until the end of next year, official sources have confirmed, amid reports that it could rise by up to £2 billion.

Defence Secretary Liam Fox insisted that the Ministry of Defence will take a "fairly stiff view" of any price increases in the massive contracts.

And he made clear that he has no intention of seeking to reopen last autumn's Strategic Defence and Security Review (SDSR), which cut a number of programmes and put back the launch date of the new carriers.

BBC reports suggested that building the HMS Queen Elizabeth and HMS Prince of Wales could end up costing the taxpayer £7 billion, up from the £5.2 billion expected at the time of the SDSR.

The ships, which are to be converted to be compatible with US jets, escaped the axe in the defence review despite massive cuts elsewhere in the Ministry of Defence budget.

They are being built by the Aircraft Carrier Alliance, consisting of BAE Systems, Babcock and Thales. HMS Queen Elizabeth will be the first to enter service, in 2019.

An MoD spokesman said final costs were "yet to be agreed". He said: "The conversion of the Queen Elizabeth Class, announced in the SDSR, will allow us to operate the carrier variant of the Joint Strike Fighter that carries a greater payload, has a longer range and is cheaper to purchase.

"This will give our new carriers, which will be in service for 50 years, greater capability and inter-operability with our allies. Final costs are yet to be agreed and detailed work is ongoing. We expect to take firm decisions in late 2012."

Speaking at a Westminster lunch, Dr Fox accepted that the Government had increased the budget and time needed for the carrier project by introducing changes to the design to allow interoperability with US and French forces. But he said: "What we are looking at is a capability that will last us, when we have it, for 50 years. Therefore it is essential to get the decisions right."

He added: "We will look at the contracting as we go through to the end of 2012 with a fairly stiff view."

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