A £6 billion private finance initiative that will revolutionise the training of British military pilots was awarded yesterday to a consortium including VT Group and Lockheed Martin, the UK and US defence companies.

The UK Military Flying Training System (MFTS) is a 25-year scheme to outsource to the private sector the training of military pilots and air crew across all three Armed Forces.

The Ministry of Defence said it had selected the consortium Ascent as the preferred bidder for the contract. It includes VT Group, the Portsmouth-based shipbuilding and support services company, and America’s Lockheed Martin, the world’s largest defence company, which is leading the production of the F35 Joint Strike Fighter.

The scheme will cover the different training needs of the entire flying element of the UK frontline, from fast-jet pilots and weapons systems operators, to rotary and multi-engine pilots. It will include the acquisition of flight simulators and possibly jet trainer aircraft.

Ascent will begin providing initial services in 2007 with full service provision expected by 2012.

The decision to award the contract to Ascent is a blow for two rival consortiums: Sterling, which includes Thales, of France, and Boeing, of the United States; and Vector, a US joint venture between KBR and Northrop Grumman.

Paul Lester, VT Group’s chief executive, said: “This is a major boost to our military support activities and establishes VT as the UK’s leading training provider in military aerospace.”

VT said it had also signed an agreement with Lockheed to offer the same training systems model to a number of other governments around the world.

MFTS is part of a growing trend by the UK Armed Forces to privatise key activities. Maintenance of warships, transporting tanks and refuelling fighter jets are all now carried out by private companies. The contracts are attractive because they lock in long-term revenues and profits.

The MoD currently spends about £4.2 billion a year on training, or 20 per cent of its annual budget. It wants to reduce waste and duplication.