(Adds CEO comments, MoD confirmation)
FANRBOROUGH, England, July 14 Britain's Ministry of Defence said its Sentinel programme would remain in service until 2018, giving the country three more years of the surveillance aircraft capability which it recently used in Nigeria to help look for 200 missing schoolgirls.
Raytheon Co, the U.S. maker of radar, missiles and other defence electronics, said it would improve software on the Sentinel to make it better equipped for maritime surveillance to help support the government's plan to extend its lifespan.
Britain, which had planned to retire Sentinel in 2015, did not put a figure on how much it was paying to fund the extension but said the bill would be covered by a 1.1 billion pound ($1.9 billion) defence investment announced earlier on Monday.
The new money would help bolster the country's ability to respond to threats such as global terrorism, the government said.
Britain has cut defence spending by around 8 percent over the last four years as part of a government plan to reduce a record budget deficit and had proposed retiring Sentinel, operated by the Royal Air Force, as a cost-saving measure in its 2010 defence review.
Sentinel has been deployed by Britain in Afghanistan, Libya, Mali and more recently Nigeria.
Raytheon CEO Tom Kennedy welcomed Britain's decision and said it reflected the airplane's performance, reliability and proven intelligence-gathering and communications capabilities during military engagements, as well as in monitoring UK flooding.
"The Sentinel has been a tremendous asset to the UK," Kennedy told Reuters.
($1 = 0.5877 British Pounds) (Reporting by Sarah Young, Andrea Shalal and Kylie MacLellan; Editing by Mark Potter)