UPDATE 1-Germany will not pursue MEADS - govt

BERLIN Feb 16 (Reuters) - Germany will not pursue a multi-billion dollar missile defence programme known as MEADS beyond its development phase, the Defence Ministry said, after its partner the United States pulled out of further funding.

On Monday, the United States said it would stop funding the MEADS project after fiscal year 2013, calling it unaffordable in the current budget climate.

"With the closing of the planned development of MEADS ... between the United States, Germany and Italy,... a realisation or acquisition of MEADS will not be carried out in the foreseeable future," the Ministry told the budget committee in a letter seen by Reuters on Wednesday.

The letter was dated Feb 15.

Lockheed Martin Corp (LMT.N) has led an international consortium developing the Medium Extended Air Defense System, or MEADS, in partnership with Italy and Germany.

But the project already came under pressure to be scrapped last year as part of efforts to cut up to 9.3 billion euros in defence spending by 2014.

The Pentagon said this week it remained concerned about the overall track record of the programme and might ordinarily have cancelled it but continuing the development phase until 2013 would avoid costly termination fees and benefit Germany and Italy.

In the letter, the ministry said it would make sure that the results of the MEADS development phase would be used as a basis for national programmes.

It would now evaluate a new approach to air and missile defence by year end and would talk to Italy, its European partner on MEADS, about those issues. (Reporting by Sabine Seibold; editing by Elaine Hardcastle)