WORKERS at helicopter manufacturer Eurocopter breathed a sigh of relief after the company’s key contract was spared the axe in the defence cuts.

Fears had been raised that the £300m agreement to overhaul the RAF’s Puma fleet would be scrapped.

This would slash in half the 200-strong workforce at the company’s base at Oxford Airport, Kidlington.

But following the publication of the Strategic Defence and Security Review, it was revealed the Puma fleet would be ‘significantly improved’.

The review said: “We will extend the life of the Puma helicopter to ensure that sufficient helicopters are available for our forces in Afghanistan.”

Although precise details of the implications for Eurocopter and RAF Benson, where the fleet is based, have not been revealed, hopes are high for its future.

Eurocopter director Tim MacMahon said: “Eurocopter is delighted that the Ministry of Defence has decided to proceed with the Puma life extension programme and looks forward to building on the good progress so far to deliver on time and cost.”

Bosses warned last month that £100m of the contract cash had already been spent on design work and materials, and they would expect this to be refunded out of the public purse if the axe fell.

The Puma fleet has seen service in Belize, Northern Ireland and Iraq. But it is now 40 years old and in need of a major overhaul including the installation of more powerful engines to cope with the heat and altitude of Afghanistan.

After winning the contract a year ago, Eurocopter has already started work on the first two Pumas, with one helicopter expected to arrive in Kidlington every three weeks in the near future.