Britain said on Sunday that any merger between EADS and BAE must ensure that British national security and jobs are preserved.

"Our approach to this has been to make it very clear that our priorities are of course the national security of the United Kingdom, second: jobs and investment in the UK," Chancellor George Osborne told Sky television.

"Those are the tests against which we are judging the proposal brought to us by these two companies," Osborne said.

(Reporting by Guy Faulconbridge, editing by Matt Falloon)