Exclusive: The cost of Britain�s two new aircraft carriers has risen by £300m to £4.2bn before the first steel for the ship�s hulls has even been cut, The Herald can reveal.

The cost of Britain's two new aircraft carriers has risen by £300m to £4.2bn before the first steel for the ship's hulls has even been cut, The Herald can reveal.

The government is now expected to try to accelerate agreement of the long-delayed joint venture construction contract to ensure that the escalating price tag does not lead to the project being scrapped.

The Treasury pegged the "maximum" cost of the warships at £3.9bn on January 1, 2007, but that figure takes no account of inflation and increases in the cost of labour and materials in the interim.

Both major partners in the venture, BAE Systems and VT in Portsmouth, have still to answer under "due diligence" financial regulations to their own boards and shareholders before they can sign a mutually-binding deal. That, say industry sources, hinges on a number of factors, including MoD recognition of and willingness to meet cost hikes.

However, even if a swift resolution is found, neither HMS Queen Elizabeth or HMS Prince of Wales are now likely to meet planned in-service dates of 2014 and 2016.

The politically-sensitive carrier contract is designed to underpin about 10,000 British shipbuilding jobs, including 3500 on the Clyde, until the middle to late years of the next decade and is regarded by Downing Street as sacrosanct in the run-up to the next General Election, due between now and 2010.

Whitehall insiders say a manufacturing agreement with the alliance, whose yards on the Clyde and Portsmouth will build most of the modular sections of the ships, is likely to be reached - but still not signed - by later this week or early next.

While this appears to be medium-term good news for the workforce at Govan and Scotstoun and for Babcock's Rosyth yard where the 65,000-tonne warships are to be assembled, it will also inevitably mean delays or cuts in other major MoD procurement programmes.

The Herald has been told that the MoD needs to free up funds for further rises of up to £60m above the £4.2bn before the joint venture can proceed, although there is nothing to prevent the government from awarding the construction contract to a single company in the meantime. The shipbuilder involved could then sub-contract the work to enable construction to begin.

The £2.5bn project to build 11 replacement tanker ships for the Royal Fleet Auxiliary under the "Military Afloat Reach and Sustainability" program is the first likely victim of delays. Five fleet tankers were due for delivery between 2011 and 2015.

The RFA needs to replace most of its existing tankers in order to meet an amendment to maritime pollution regulations that requires tankers to be double hulled. With the exception of the new Wave-class ships, the RFA has a single hulled tanker fleet which will be become obsolete from 2010, although a waiver can be claimed for government-owned vessels.

A spokesman for BAE Systems said yesterday: "We continue to work with our joint venture partners and await confirmation by the government of its decision to give the go-ahead for the construction contract."

Nicola Sturgeon, deputy leader of the SNP and MSP for Govan, warned earlier this month that up to 400 jobs were already at risk at Govan and Scotstoun because of the delays.

She said: "Even if the contract was signed immediately, and that seems unlikely, work would not begin until July next year at the earliest and that would mean redundancies in the interim as the last work on the final Type 45 destroyer runs out and a gap develops."