European aerospace group EADS denied a report that it was preparing for a possible collapse of the 20 billion euro (about £20bn) A400M military aircraft programme as it tries to renegotiate late delivery penalties.

A German newspaper reported potential losses due to delays had forced Airbus' parent company to question its role in Europe's biggest single arms development.

"According to our information, the mass of A400M problems is prompting a discussion at EADS over whether the project should be maintained," the newspaper said.

But EADS said: "There is no discussion within EADS about a scenario to withdraw from the A400M programme."