Minsters are considering restricting British firms’ security cooperation with Europe, as the row over the EU satellite Galileo escalates.
According to the Times, the Treasury is looking into banning companies from sharing sensitive information with the bloc if Britain is excluded from the €10 billion initiative.
The UK has played a central role in the EU’s development of Galileo, which is set to rival the US-run Global Positioning System (GPS) when it is launched 2020.
However, Brexit negotiations have thrown the project into turmoil, with the EU threatening to side-line Britain by suggesting key components are made on the Continent in the future.
In retaliation, the UK is considering blocking the Galileo system from using British overseas territories as monitoring bases.
The standoff is said to be causing concern in Westminster that post-Brexit defence and security cooperation could be under threat.
A Whitehall source told the Times: “There is concern about what this means for the future of our security partnership.
“The government said we were not going to make it a bargaining chip but the commission turning round and branding the UK a security threat has left us with concerns about what that means.”
A government spokesman said: “It is in our mutual interest to remain in (Galileo) as part of a strong security partnership with Europe.”
