The Ministry of Defence has rejected calls to privatise the management of the giant Abbey Wood complex which employs about 7,000 people in Filton.

The long-awaited review by businessman Bernard Gray said that the MoD's "sclerotic" processes for buying equipment for the Armed Forces were inadequate for meeting the demands of modern conflicts like Afghanistan.

It said that the current equipment programme was now "unaffordable", being an estimated £35 billion over budget, with individual projects running, on average, five years late.

Defence Secretary Bob Ainsworth acknowledged that the report had highlighted "problems" and "shortcomings" in the system.

But he rejected one of its central recommendations, that the Defence Equipment and Support organisation based at Abbey Wood should be put at arm's length from the MoD, as a Government-owned but contractor-operated body.

Mr Ainsworth said in a Commons written statement: "The Government has thought about this carefully, but we are not convinced that such a change would ultimately lead to better outcomes for the armed forces or defence generally.

"Having the DE&S as fully part of defence ensures a close working relationship with the military. Equipment acquisition is core business for my department, and we have to get it right."