CORRECTED - UPDATE 2-Fixing F-35 program seen critical for Lockheed

(Corrects name of Pratt & Whitney official throughout to Bill Gostic, instead of Costic) (Adds interview with Pratt & Whitney)

By Andrea Shalal-Esa

WASHINGTON, Feb 11 (Reuters) - Lockheed Martin Corp (LMT.N: Quote, Profile, Research, Stock Buzz) must improve its execution of the F-35 Joint Strike Fighter program, or risk seeing its massive funding being siphoned off to pay for other weapons programs, analysts said on Monday.

Valued at $299 billion over the 28 years, the F-35 program is the most expensive weapons program in U.S. history, with yearly spending levels set to increase as the fighter jet program gears up for full-rate production in the next decade.

The Pentagon is developing versions of the F-35 for the U.S. Air Force, Marine Corps, Navy and for export.

"We believe that F-35 development execution needs to improve quickly or the program could become a source of funds for other priorities," Joe Nadol at J.P. Morgan Securities wrote in a note to investors on Monday.

"We view improving execution on this program as the highest priority for LMT management in the coming months, as it is by far and away the most important growth driver for the company over the next five to 10 years," he said.

Nadol said a recent failure with the F135 engine being developed by Pratt & Whitney, a unit of United Technologies Corp (UTX.N: Quote, Profile, Research, Stock Buzz), and other delays were "collectively becoming a potentially damaging problem."

Lockheed has downplayed the seriousness of the engine issue, saying such technical issues are common early in the development of a new aircraft program, although it conceded a potential delay in delivery of the Pratt & Whitney engine.