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UPDATE 2-US lawmaker aims to jump-start aerial tanker buy

* Murtha pushes split buy to break tanker deadlock

* Says Senate Appropriations chair sees eye to eye

* Would use war-funding measure to jump-start program (Adds Inouye spokesman, Boeing, Northrop comment)

WASHINGTON, March 12 (Reuters) - A measure that funds the wars in Iraq and Afghanistan could jump-start the long-delayed purchase of U.S. Air Force aerial-refueling planes, said a lawmaker who holds Pentagon purse strings.

“There’s nothing more related to the war than tankers,” Rep. John Murtha, who heads the House of Representatives’ Appropriations Defense subcommittee told reporters Thursday.

Murtha said he and Sen. Daniel Inouye, chairman of the Senate Appropriations Committee, saw eye to eye on dividing the lucrative market between rival suppliers, despite Pentagon opposition on cost grounds.

A marathon competition to sell tankers, which are used to refuel warplanes in mid-air, has pitted Boeing Co BA.N against a team of Northrop Grumman Corp NOC.N and Airbus parent EADS EAD.PA.

“The senator is reviewing the issue and has not yet taken a position,” said Rob Blumenthal, a spokesman for Inouye, a Democrat of Hawaii.

Murtha, a Pennsylvania Democrat, said he was considering putting a “couple billion dollars” in the second stage of a fiscal 2009 war supplemental bill to fund tanker development.

The war-supplemental spending must be approved by Congress by May. This would help the Air Force start getting the aircraft, its No. 1 acquisition priority, sooner than if dealt with in the core Pentagon budget, Murtha said.

Lawmakers probably would add at least $20 billion to the measure overall to cover other arms purchases, boosting its total to perhaps $95 billion, he told a defense industry conference sponsored by Aviation Week and McAleese & Associates.

“You can’t operate in Iraq and Afghanistan without tankers,” Murtha said. On Wednesday, Murtha’s plans for splitting the purchase were embraced by Rep. Neil Abercrombie, chairman of the House Armed Services panel that oversees air and land programs.

The Air Force has been stymied in two previous attempts to start replacing its KC-135 tankers, which average nearly 50 years old.

The first effort, rooted in the post-Sept. 11 collapse of the commercial airliner market, fell apart after a $23.5 billion Boeing lease-buy deal ended in scandal.

Northrop was awarded a contract in February 2008 for what were to have been an initial 179 tankers valued at $35 billion. It was canceled after congressional auditors upheld a Boeing challenge over the way the Air Force chose the winner.

This prompted Defense Secretary Robert Gates, President Barack Obama’s sole cabinet holdover from the Bush administration, to order a renewed competition in the coming months. He has argued against splitting the purchase.

Northrop Grumman said it was confident that in a head-to-head competition it would be selected again.

“However, if Congressmen Murtha and Abercrombie are correct that the only way to move this badly needed tanker program forward quickly is through a dual procurement, then Northrop Grumman would support that effort,” said Randy Belote, a company spokesman.

Boeing has not spelled out its position on a possible dual-source arrangement.

“Whatever decision is made, Boeing is prepared to put forward the right tanker to meet their requirements at the best value for the taxpayers,” said Dan Beck, a company spokesman. (Editing by Maureen Bavdek and Tim Dobbyn)

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