JAPAN will buy American-built F-35 fighter plane over BAE Systems’ Warton-built Eurofighter.
The two planes, and Boeing’s Super Hornet, were in the running for the lucrative contract for 42 aircraft.
The deal was estimated to be worth £5.1bn.
A BAE spokesman said the Euro-fighter consortium was disappointed with losing out after five years of work on the bidding process – but other opportunities were being pursued.
The four-nation consortium is now targeting deals with India, the UAE and Switzerland.
The Indian government is likely to announce its choice of jet between Christmas and New Year. It is looking at buying 126 jets in a deal worth up to £7bn.
The spokesman said: “We respect Japan’s decision and look forward to meeting with the Japanese Government and the assessment team to discuss the key elements of our bid and the selection process in order to understand the reasons behind the decision.
“With Eurofighter Typhoon, we offered Japan the most advanced and powerful combat aircraft on the world market.
“We are also convinced the bid we submitted was attractive and competitive, providing a cost effective air defence aircraft with true multi role capability as well as a comprehensive industrial participation solution.
“We remain extremely confident in Typhoon’s outstanding and operationally proven capabilities and will continue to pro-actively pursue opportunities around the world.”
Japan’s defence minister Yasuo Ichikawa said the decision to opt for the F-35 would help his country adapt to changes in the East following the death of North Korean leader Kim Jong Il.
He told reporters: “The security environment surrounding future fighter jets is transforming. The F-35 has capabilities that can firmly respond to the changes.”
Japan’s close relationship with America meant the F-35 was always the unofficial favourite.
BAE announced 3,000 job losses in the UK earlier this year – including more than 800 in Warton – following a slowdown in orders for the state-of-the-art plane. Work has been slowed to maintain production lines while new buyers are sought.
BAE bosses will take little solace in the fact they make a part of the F-35 for Lockheed.