The UK government is to provide Airbus with a launch aid package worth £350m to develop the A350 XWB, a carbon-fibre aircraft that aims to rival Boeing’s Dreamliner.

The package amounts to roughly half what Airbus was seeking from the UK to develop the wide-body jet.

Lord Mandelson, the Business Secretary, is expected to confirm that UK will support the launch of Airbus’s new carbon-fibre aircraft when he visits the company’s facility at Filton near Bristol.

The UK, French, German and Spanish governments have traditionally supported new Airbus aircraft through repayable launch aid. The amount of work allocated to each country is proportional to the loans given.

The UK has typically received about a fifth of the work on Airbus and has specialised in the design and manufacture of wings.

Airbus is thought to have asked the British Government for between €700 million (£600 million) and €850 million.

But the Treasury’s growing debt mountain means it is only pledging £350 million. It is not yet known whether the UK will lose work on the project as a result.

Airbus is seeking a total of €3.5 billion to help to develop the A350, whilst the entire development budget for the aircraft is expected to be about €12 billion.

The French and German governments committed to front €2.5 billion in the A350 at a meeting of ministers at the Paris Air Show in June.

Airbus employs about 11,000 people at Filton and Broughton in North Wales.