BAE Systems have warned that the failure of a merger between Airbus owners EADS and BAE would result in mass job cuts.

The warning comes from privately released reports which looked at the jobs that could be saved from the merger and the creation of a globally competitive company that would potentially secure work for both groups.

BAE has reduced its workforce in recent years as defence spending falls in a time of recession, with multiple layoffs within the UK.

The warning of job cuts will place increased pressure on the UK government to green-light the merger.