CORRECTED - UPDATE 1-Italy opts against F-35 fighter early phase role

(Corrects spelling of last name of spokeswoman in paragraphs 5,6)

(Adds details and background on F-35, byline)

By Jim Wolf

WASHINGTON, Oct 10 (Reuters) - Italy has decided against taking part for now in a coming stage of the international F-35 fighter aircraft program, Lockheed Martin Corp (LMT.N), the primary contractor, said Friday.

"Italy was studying the possibility of joining the F-35 Initial Operational Test and Evaluation phase but has elected not to participate at this time," the Bethesda, Maryland-based company said in an e-mailed statement.

The F-35 is a family of radar-evading fighters designed to replace aircraft of the United States and eight co-development partners, including Italy, as well as other potential buyers. It is the costliest U.S. arms program ever at a projected $299 billion.

Italian officials had been considering early purchases of two F-35A models for operational test and evaluation. The officials had been weighing buying one as early as fiscal 2009, with a second the following year.

Italy's decision to steer clear for now would not affect planned yearly increases in F-35 production quantities, said Cheryl Amerine, a Lockheed Martin spokeswoman.

Officials at the Italian embassy in Washington had no immediate comment. Amerine said she did not know the reason Italy had opted against taking part in the operational test and evaluation phase.

"Italy remains a strong partner in the F-35 Joint Strike Fighter program, and will continue as a full participant in F-35 flight test activities," she said.

Richard Aboulafia of Teal Group, a Fairfax, Virginia, aerospace consultancy, said the decision may reflect pressure on Italy's defense budget as it continues to buy other aircraft.

The F-35's development also was financed by Britain, the Netherlands, Turkey, Canada, Australia, Denmark and Norway. The Netherlands plans to decide early next year whether to buy two F-35s for initial operational tests and evaluation, the Dutch defense attache, Air Cdre A.A.H. de Bok, said in an e-mail to Reuters.

F-35 competitors include Saab's (SAABb.ST) Gripen, the Dassault (AVMD.PA) Rafale, MiG-35 and Sukhoi Su-35, and the Eurofighter Typhoon, made by a consortium of British, German, Italian and Spanish companies.

Lockheed's chief F-35 subcontractors are Northrop Grumman Corp (NOC.N) and BAE Systems Plc (BAES.L).

Two rival, interchangeable F-35 engines are under development. One is built by United Technologies Corp's (UTX.N) Pratt & Whitney unit, the other by a team of General Electric Co (GE.N) and Rolls-Royce Group Plc (RR.L).

The United States currently plans to buy a total of 2,443 F-35 models -- including 1,763 for the U.S. Air Force and 680 for the Marine Corps and Navy together.

Hundreds of others may be sold overseas to replace a range of fighters, including Lockheed F-16s and Boeing Co (BA.N) F-18s. (Editing by Gary Hill)