European Commission regulators have approved £60 million ($99 million) in aid from the UK Government to aerostructures firm GKN to support aircraft wing component research.
The aid is in the form of a repayable loan, to be reimbursed with interest through a levy on future sales.
In a statement European competition commissioner Neelie Kroes says the aid is limited to the minimum necessary and has only a minor impact on competition.
"UK aid for GKN will boost research and development in the aerospace sector in Europe," she says. The project aims to develop technology to reduce aircraft weight and fuel-burn.