Business Secretary Lord Mandelson is today due in Bristol to announce a £600 million interest-free Government loan to Airbus to keep it in the black as it launches its A350 plane.

The move will help safeguard 500 jobs at the Filton plant of the aerospace giant and its manufacturing partner GKN.

Lord Mandelson was due to unveil the cash injection at Filton this morning before touring the plant and meeting staff.

Industry sources say the money will prevent Airbus from plunging into the red as it develops the A350 plane, which will use more than 50 per cent lightweight composite parts.

Airbus has said it hopes to at least match the record number of deliveries achieved last year of 483 aircraft, and has pledged to deliver 10 more A380s this year. Airlines pay the bulk of the cost of new planes on delivery.

However, it has predicted a plunge in orders of up to 300 as airlines struggle with the economic downturn. Airbus had 777 orders, after cancellations, last year.

Analysts also believe the company is suffering from a "Brazil effect", with adverse publicity surrounding the crash in June of an Air France A330 flying from Rio de Janeiro to Paris, in which 228 passengers died, affecting airlines' willingness to order from the company.

Although no cause for the crash has been determined, Airbus has advised airlines to replace external speed sensors suspected of having been a factor in the incident.

The loan will help Airbus meet non-recoverable costs such as research and development for the new plane as well as test flights, which are due to start in 2012.

The money is known as "repayable launch investment" and will be repaid when the mid-range A350 aircraft begins to roll off the production line in early 2013.

Airbus in Filton will design the plane's wings, landing gear and fuel systems.

GKN will manufacture the lightweight composite wings for each of the A350 planes at its new plant at Easter Compton near Avonmouth.

The A350 will be the first Airbus with its body and wing structures made primarily of carbon fibre reinforced plastic.

The A350 is designed to compete with the Boeing 777 and the Boeing 787 and Airbus claims that it will be more fuel-efficient.

The new plant is part of GKN's £300m investment in the aerospace sector in the West, which saw it take on the manufacturing operation and 1,500 employees at Airbus' site in Filton at the turn of the year.

Airbus is predicting demand for more than 5,700 A350-type planes over the next 20 years.

News of the investment will be welcomed at GKN, whose automotive arm has cut 3,700 jobs across the globe.

Last month, Lord Mandelson approved a Government investment of £130 million to help Rolls-Royce to open four new plants across the UK.

Neither Airbus nor unions would comment ahead of today's announcement.