BRITAIN'S last stake in the helicopter industry looks certain to fall into foreign hands after engineering group GKN agreed in principle to sell off its 50 per cent stake in AgustaWestland for £1.06 billion.

GKN is one of the Isle of Wight's biggest employers with about 600 staff at its Cowes facility making parts for civil and military aircraft manufacturers, including Agusta-Westland and the likes of Boeing and Airbus.

News of the deal comes just days after GKN confirmed it was in negotiations with Finmeccanica, its Italian partner in AgustaWestland, to sell off its half of the business.

GKN described the speedily arranged deal, which includes the transfer of Westland property assets at its Yeovil base to Finmeccanica, as a "transforming move" for the group.

AgustaWestland makes a broad range of helicopters, including the multi-role military Super Lynx, and currently holds the licence to build Boeing's Apache attack helicopter in the UK.

Its sale to the Italians leaves the industry dominated by North American and European manufacturers such as Sikorsky, Boeing, Bell and Eurocopter, owned by European aerospace group EADS.

In fact, the deal comes despite a late intervention by rival EADS designed to scupper the move.

EADS, Europe's largest Aerospace group, was to meet the government to talk over possible alternatives to GKN selling its stake.

Westland has a controversial history, with the so-called Westland Affair in the mid 1980s leading to the resignation of ministers Michael Heseltine and Leon Brittan after furious disagreements with PM Margaret Thatcher over a rescue package for the then ailing company.

GKN chief executive Kevin Smith said that although AgustaWestland had created tremendous value for the group and Finmeccanica, the sale would allow both shareholders to take advantage of that value.

"It is the right price at the right time," he said.

The sale is expected to get government backing as long as the UK retains a strategic helicopter making capability.