"The progress and performance of the F-35 over the past two years has not been what it should," said Gates, adding, "a number of key goals and benchmarks were not met."

The Pentagon will withhold 614 million dollars in performance fees from lead contractor Lockheed Martin, he said.

Gates said he took the decision because "the taxpayer should not have to bear the entire burden of getting the JSF (Joint Strike Fighter) program back on track."

The move was taken with the agreement of Lockheed Martin, he told a news conference to present the Pentagon's defense budget.

Gates said his department also bore blame for the "troubling performance record" of the Joint Strike Fighter and fired the Marine officer in charge of the program, Major General David Heinz, who was named last year.

He said a higher-ranking, three-star general would take over the post, reflecting the importance of the F-35 project.

Gates has not hesitated to sack a number of top officers and officials during his tenure as defense secretary since 2006.

He said the move was part of his effort to set a tone that "when things go wrong, people will be held accountable."

Both Gates and President Barack Obama have repeatedly warned that they will not tolerate the kind of delays and cost overruns that have plagued weapons programs in the past.

Much is riding on the stealth aircraft, which Gates has held up as the future of US fighter jets after having pushed through an end to the costly F-22 Raptor, despite opposition from some lawmakers.

Gates has portrayed the F-35 as a more affordable, more flexible aircraft but flight tests have been repeatedly pushed back and an internal Pentagon review found sky-rocketing costs.

The administration's 2011 defense budget unveiled Monday calls for "robust funding" of the Joint Strike Fighter, and Gates said nearly 11 billion dollars would go to buying 43 planes.

The military plans to buy more than 2,400 of the aircraft over the next 25 years, with each branch of the armed services getting a tailored version of the jet.

Eight other countries are also supporting the program, led by Britain which has invested two billion dollars in the F-35's development.

But officials have acknowledged that persistent technical problems could lead some governments to back off buying large numbers of planes.

Despite mushrooming costs, the F-35 program had been "restructured" and the aircraft was on track "to become the backbone of US air superiority for the next generation," Gates said.

The program faced no "insurmountable" technological or other problems, he said.

Gates also warned that he would recommend that Obama veto any attempt by Congress to fund an alternate engine for the F-35 as well for additional C-17 transport planes.

Any benefits to building an alternate engine for the F-35 would be "offset by excess costs, complexity, and associated risks," he said.

As for the C-17 aircraft, he said studies had shown that "the Air Force already has more of these aircraft than it needs."

He said he was aware of political pressure in Congress to fund the C-17 and the second engine for the F-35, but he added: "Let me be very clear: I will strongly recommend that the president veto any legislation that sustains the unnecessary continuation of these two programs."

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