Business secretary, Lord Mandelson's promise to provide European plane-manufacturer, Airbus with a loan worth £340 million to develop its new wide body A350 XWB plane, has raised the hackles of America.

However, the promised amount is just the half of what the Airbus had asked for. Airbus' sites in England specialize in wing-manufacturing.

Lord Mandelson said the financial assistance would safeguard as many as 1,200 jobs at Airbus' plants in Filton and Broughton. It will also protect additional 5,000 at Airbus suppliers.

But the US has complained against England's aid to Airbus, saying the concerned aid breaches the trade regulations.

US said, "The commitment of launch aid, or any other form of preferential financing, by any of the EU member states would be a major step in the wrong direction."

France as well as Germany has also promised support for the Airbus' A350 project, while Spanish govt. is in talks with Airbus for the same.

It may be noted here that trade rules do not tolerate subsidies that deform the market.