The Cinco Dias daily sourced trade union officials as saying the top executive of Airbus, which EADS controls, relayed the threat during a recent visit to the Airbus site at Getafe near Madrid.

The report said that Airbus Chief Executive Officer Tom Ender told union officials that Louis Gallois, the chief executive of European Aeronautic Defense and Space Company had sent off letters to the governments involved in the A400M project, threatening to scale down development if agreement on funding was not reached by Monday.

Airbus and its parent company EADS have been in talks for months with seven NATO nations, trying to prevent the project from collapsing.

If the involved parties failed to reach agreement by Monday, then work on the A400M would be transferred to other Airbus projects, Cinco Dias reported.

The partner governments include Germany, France, Britain, Belgium, Luxembourg, Spain and Turkey.

Airbus has refused to comment but a spokesman of EADS said the ongoing talks between the involved nations were of "urgent nature."

The deal could affect as many as 10,000 European jobs linked to the ambitious but long-troubled project for the production of A400M tactical and cargo planes.

Contracts have been signed for 180 planes at a fixed price of $28.7 billion.

The A400M is Europe's biggest military project but years behind schedule, costing the company nearly $150 million a month in overruns.

Germany, the biggest customer of the A400M, has ordered 60 units but Chancellor Angela Merkel is resisting revisions in the deal.

Instead, senior government officials said this week that Germany was considering loans as an option to fund extra costs for the A400M military transport plane program.

Handelsblatt newspaper reported that Germany's defense minister was planning to finance more than $1billion in extra costs for the controversial project through guarantees from the country's "Germany Fund" as well as through credits from the government-owned KfW bank.

The "Germany Fund" is the German government's bailout fund for companies.

Alternatively, other defense ministers from European countries that have placed orders for the transport plane have proposed cutting the number of planes to be delivered, than axing the program.

Turkey, also, has expressed its commitment to the project but like Germany has refused to injected additional funds.

The project was first agreed to by the seven nations in 2003.

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