DEFENCE Secretary Malcolm Rifkind yesterday met his Bahraini

counterpart to discuss a vital #100m deal that could lead to a battle

for control of bankrupt manufacturer Ferranti.

It was the failure of Ferranti to secure the ''Delmon Eye'' air

defence contract with Bahrain in an acceptable timescale, that led to

the company being declared bankrupt on December 1, with debts of #110m,

and jeopardising more than 3000 jobs.

Bahrain is seeking to upgrade its air defence network, which is tied

in with that of neighbouring Saudi Arabia.

Mr Rifkind discussed the contract during visits to Bahrain and Saudi

Arabia two weeks ago, and yesterday Bahraini Defence Minister, Lt. Gen.

Khalifa bin Ahmed al-Khalifa, arrived at the MoD for follow-on talks.

If a deal is agreed, interest in Ferranti will soar, and may lead to a

fight for the company between GEC and a management-led consortium.