"EADS and Dassault have signed a founding agreement on MALE and UCAV drones, which prefigures the future of the European industry for reconnaissance and combat military aircraft," Alliot-Marie said at the opening of the week-long Eurosatory defence fair north of Paris.

Medium Altitude Long Endurance (MALE) drones are designed for observation and reconnaissance missions only, while Unmanned Combat Aerial Vehicles (UCAVs) are designed for combat.

EADS will become a partner in a year-old program to develop a demonstration combat drone, being led by Dassault Aviation and the French government, the two groups said in a joint statement.

EADS will also be placed in charge of a new government program to develop a new prototype drone called "EuroMale", capable of carrying out lengthy and complex missions, Alliot-Marie said.

France announced in June last year the launch of a project to build prototype combat drones, and has already given 300 million euros (370 dollars) towards the building of the demonstration drone whose first flight is planned for 2008.

The Swedish and Greek governments have both announced their intention to participate in the project.

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