The Ministry of Defence is poised to hand another major deal to a US company, with a £2bn contract for new Apache helicopters set to be awarded to Boeing.

Leonardo, the Italian aerospace manufacturer until recently known as Finmeccanica, had been battling to land the deal, which would have seen the refitted helicopters produced at its base in Yeovil, Somerset, where 3,700 staff are employed. Such an agreement would have provided a significant long-term boost to UK jobs and skills.

However, it is understood the MoD has decided to hand the 50-aircraft contract, worth £2bn over its lifetime when servicing is included, to Boeing.

An announcement could come as soon as early July at the Royal International Air Tattoo or Farnborough air show.

The original fleet of 67 British Apaches was produced by Westland in Yeovil, which in 1995 started assembling US-built components and added UK modifications that more than doubled the price to about £44m per helicopter. Westland is now part of Italian state-backed Leonardo.