UPDATE 2-US House scraps FY11 funding for F-35 engine

* US House lawmakers vote 233-198 to stop funding

* Pentagon says alternate engine won't create savings

* Republicans trying to cut $61 bln from federal spending (Updates throughout with House vote)

By Andrea Shalal-Esa

WASHINGTON, Feb 16 (Reuters) - The U.S. House of Representatives on Wednesday voted to eliminate funding for a second engine for the F-35 Joint Strike Fighter that the Pentagon has called an "unnecessary and extravagant expense."

The House voted 233 to 198 to approve an amendment that will halt $450 million in fiscal 2011 funding for the engine being developed by General Electric (GEA.N) and Britain's Rolls-Royce (RR.L) as an alternate to an engine built by United Technologies Corp (UTX.N) unit Pratt & Whitney.

The vote must still be approved by the Senate but it was clearly an important victory by newly elected Republican lawmakers who are concerned about spiraling U.S. deficits.

"This was an important vote to demonstrate that nothing should be off limits when it comes to cutting wasteful spending," said Steve Ellis, vice president of the watchdog group Taxpayers for Common Sense. "If we're going to deal with the enormous deficits, everything has to be on the table and that certainly includes defense spending."

The vote came just hours after Defense Secretary Robert Gates told the House Armed Services Committee that he would look for all available legal options to kill the program if lawmakers insisting on funding it again.

GE said in a statement that it "will continue to press the case for competition as the FY11 budget is finalized and as the FY12 budget debate continues."

Just before the vote, Democratic Representative John Larson, whose Connecticut district has Pratt-Whitney jobs, predicted some strong support in the Senate for stopping work on the second engine.

The Pentagon has tried for five years to kill the engine, only to have lawmakers add funding for the program back in. Proponents of the program argue that maintaining competition between the engine teams will save money in the longer term.

Gates highlighted his opposition to the program, calling it "an unnecessary and extravagant expense, particularly during a period of fiscal contraction."

Pentagon acquisition chief Ashton Carter on Wednesday underscored his opposition, telling industry executives that Pentagon assessments had concluded that funding the second engine now would not pay off in the long run.

"This isn't a philosophical matter," the Pentagon's chief weapons buyer told a conference hosted by Aviation Week on Wednesday. "It's a cold analytical judgment that the large ... cost of preparing a second engine for completion will not in any way, that we can demonstrate, be paid over the long term."

The amendment was introduced by Representative Thomas Rooney, a Tea Party freshman congressman from Florida, to a Republican bill that would cut $61 billion from federal spending for the rest of fiscal 2011, which ends Sept. 30.

But the effort faces opposition from other Republicans and Democrats who are fighting to maintain funding for job-rich weapons programs and argue that military threats are not diminishing.

Gates told lawmakers it would cost $3 billion more to complete the program, money he says is needed elsewhere.

GE, Rolls Royce and their congressional backers say it would cost just $1.8 billion to finish development, but having two engines could save over $20 billion in the long run. (Reporting by Andrea Shalal-Esa, Susan Cornwell and Richard Cowan; Editing by Dave Zimmerman and Tim Dobbyn)