The defense industry expects the government's project to domestically develop a new generation of antisubmarine patrol and transport aircraft would generate more than 1 trillion yen in demand.

There is concern, however, that the United States may ask for joint production as it did for a fighter jet in the 1980s.

The government's Security Council, headed by Prime Minister Yoshiro Mori, moved last month to earmark 5.3 billion yen out of a 4.96 trillion yen fiscal 2001 defense budget to cover the first year of the project.