Babcock fails to get UK approval for proposal to add to maintenance contract

LONDON (Reuters) - (The July 28 story was corrected to remove reference to Sunday Times report in the third paragraph after the newspaper withdrew its original article, changes lead and headline to show that Babcock proposed additional services to an existing contract.)

Defence and engineering firm Babcock <BAB.L> has failed to secure support from Britain's defence ministry for a proposal to add some services to an existing long-term armoured vehicle maintenance contract.

"Value for money is always one of our key considerations and on that basis we have decided not to progress Babcock's proposal," the Ministry of Defence said in a statement.

A defence ministry spokesman was not immediately able to confirm the value of the deal.

Babcock's shares fell as much as 10 percent after it cut its sales growth forecasts earlier this month, blaming delays to British government spending on submarines and the completion of aircraft carrier work.

"Babcock remain one of our key industrial partners providing an essential contribution," the defence ministry said.

(Reporting by David Milliken and Paul Sandle; Editing by Guy Faulconbridge and Adrian Croft)