Rishi Sunak is pushing Berlin to approve the sale of Typhoon jets to Saudi Arabia ahead of a visit to Britain by Mohammed bin Salman.
The Prime Minister has personally urged Olaf Scholz, the German chancellor, to give the green light to the defence deal, which is worth at least £5 billion.
Typhoon jets are designed, manufactured and maintained by BAE Systems, which employs 5,000 people on the programme in Lancashire.
However, defence sources told The Telegraph it was possible Germany could “scupper” the inter-government deal agreed in March 2018 to sell 48 of the multi-role jets to the Middle Eastern country, which accounts for 12pc of BAE revenues.
The Eurofighter Typhoon was developed by a consortium of British, German, Italian and Spanish companies under Nato’s watch in the 1980s. As a result, the consent of all four nations involved is required to export the planes.
Germany imposed a ban on exporting weapons to the Middle Eastern country after Saudi agents killed Jamal Khashoggi, a journalist and critic of Crown Prince Mohammed.
Mr Sunak has become heavily involved in talks over how to rescue the agreement, which is threatened by splits within the German coalition.
The Crown Prince is expected to visit the UK this autumn after he and the Prime Minister pledged to boost Anglo-Saudi defence ties.
Mr Scholz, from the Social Democrat party, is said to be in favour of approving the supersonic fighter jets deal and is sympathetic to Britain’s economic arguments.
However some senior members of the Greens, with whom his party are in a coalition, oppose it because of Saudi Arabia’s human rights record.
Downing Street is said to have explored launching legal action to bypass Berlin, according to initial reports by the Times, but such a move would sour relations with a key European ally.
As well as securing jobs at BAE, other major defence companies with UK operations are set to benefit from an agreement with the Saudis.
Rolls-Royce is part of the consortium that builds the EJ200 engines that power the Typhoon, while Leonardo, the Italian defence group, builds the jet’s advanced radar at its Edinburgh base, along with avionics systems at its Luton plant.
In 2007 BAE sold 72 Typhoons to the Saudi air force. A defence source told The Telegraph: “We have been trying to sell them more. If any of the nations that designed and produced that aircraft aren’t prepared to sell to Saudi that will scupper any deal.”
The source stressed that it was for the Government, and not the military, to engage with Germany over the potential sale.
One BAE source told The Telegraph they had it on good authority that there appeared to be “movement” on Germany’s position in the past year. “It doesn’t appear clear on their view any more hence why the PM is trying to get a clear answer,” they said.
Some sources have suggested to BAE that the deal could be done without Germany, as they referenced a Memorandum of Understanding among the partners that states no partner should stop another from export opportunities.
“Thus that partner (Germany) can excuse itself but we would need to then make the parts usually built by Germany,” they said.
The source stressed that it made sense from an industry perspective to work with the Saudis, not against them.
“From a geopolitical point of view, it’s better they align with the West and Western kit than our adversaries,” they added. “That’s of high strategic importance. It’s not just about money.”
According to a study by Oxford Economics, the Typhoon fighter jet programme supports more than 20,000 jobs across the UK economy. The jets are designed, manufactured and maintained by BAE Systems, which employs 5,000 people on the programme in Lancashire.
Shephard aerospace analysts last week warned that high running costs and rising competition meant that the Typhoon appeared to have “lost its market niche” and there were scant future export opportunities.
Meanwhile, efforts have been made to repair bridges with Saudi Arabia following Russia’s invasion of Ukraine, given the strategic significance of the Gulf nation to the West.
The prospects of arms exports recommencing have also been improved by a UN-brokered ceasefire in the nine-year long Yemeni civil war.
Mr Sunak held a phone call with the Crown Prince on Aug 17, during which he invited him to visit Britain for talks “at the earliest opportunity”.
Downing Street said after the conversation that the pair had discussed how they would “strengthen our close cooperation on defence and security”.
“The Prime Minister reiterated the UK’s long-standing commitment to support Saudi Arabia’s security and regional stability,” a No 10 spokesman added.
Mr Sunak is then said to have personally raised the idea of resurrecting the Eurofighter deal in a telephone call with the German chancellor last month.
Sir Tim Barrow, the UK national security adviser, held talks with Berlin’s defence ministry while UK diplomats reached out to opponents in the Bundestag.
A government spokesman said: “When considering any potential export of Eurofighter, we work closely with the governments of Germany, Italy and Spain, in line with the commitments each nation has made to support the others’ exports.
“Last year, we welcomed Germany’s decision to extend export licences for parts for Saudi Arabia’s existing Eurofighter aircraft for three years. The UK remains steadfast in its commitment to our strategic defence relationship with the Kingdom of Saudi Arabia.”
A German government spokesman said: “As a matter of principle the federal government does not comment on matters of internal coordination.”