The sale will bring BAE net proceeds o 1

The ?14m contract will see Capita de elop a similar system to that used or the congestion charge whereby cameras identi y number plates and check them against a database. The deal will run until 2009, Transport or London said.Capita also won a ?90m extension to its contract to operate the London congestion charge. The scheme will be extended to areas such as Notting Hill and Kensington in the west o the capital in ebruary.The ee, which has risen to ?8 a day rom ?5 since it began in 2003, has been designed to reduce tra ic. The scheme does not apply to cars, instead ocusing on older buses, coaches, ans and minibuses.Transport or London has signed up Capita to de elop a system or identi ying hea y ehicles that do not meet EU emission standards. The scheme hinges on the results o a public consultation due to take place in No ember and inal appro al rom the London Mayor, Ken Li ingstone The project could be in operation by early 2008.

Its tari zone is due to be expanded to the west o the capital early next year.Transport or London has pledged to impro e air quality in London by establishing a "low emission zone" whereby ehicles that hea ily pollute the air will be charged up to ?200 a day to enter the Greater London area. BAE said the board ote in a our o selling the stake had been unanimous.. Capita has been contracted to de elop a system geared towards penalising the dri ers o polluting ehicles in London as part o a wider initiati e to reduce pollution in the capital. The scheme could come into e ect by 2008 when hea y ehicles ace sti penalties unless they comply with stringent emission standards set by the European Union. The company also won an extension to its contract to operate the congestion charge system in London. But the Go ernment is working on an agreement with EADS that will gi e the UK a ixed workshare on Airbus, the right to nominate a director and guarantees on uture research and de elopment work.BAE will now ha e to con ene an extraordinary meeting o its shareholders to appro e the Airbus sale, although this is seen as a ormality. On top o this Airbus is aced with the longer-term cost o replacing the workhorse o its leet, the narrow-bodied A320, and a dollar exchange rate which is increasing the break-e en point on new aircra t programmes.BAE's decision to quit Airbus will raise ears about the long-term security o the 14,000 UK jobs that depend on the programme. O this, up to ?500m will be handed to shareholders through a share buy-back.

BAE may also use some o the money to top up its pension und. The rest will be used to pay down debt and inance the purchase o other de ence companies.Airbus is acing major challenges to bring its A380 super-jumbo programme back under control a ter production delays which could cost EADS &8364;2bn (?1.4bn) in lost pro its. The new wide-bodied A350 jet which Airbus has decided to launch in competition to the Boeing 787 Dreamliner is orecast to cost &8364;8bn to de elop - twice the initial orecast. BAE had hoped the sale would raise twice that amount.BAE said, ha ing considered an audit o Airbus's prospects conducted by the accountants PricewaterhouseCoopers, it had concluded "a signi icant amount o management ocus, time and in estment will be required to address the issues currently acing Airbus to impro e its operating and inancial per ormance and thereby increase its alue".The company added there were ine itably risks in any such reco ery programme and, had it decided to retain the shareholding, BAE might ha e had to wait an "extended period" be ore it could sell its stake at a materially higher price.The sale will bring BAE net proceeds o ?1.2bn. But these are not problems we ha e at the moment."Mr O'Rourke added: "Customers are becoming increasingly sceptical o a City-oriented corporate world and there is a genuine opportunity or a mutual insurer to win customers' hearts and minds with a truly competiti e o ering.". BAE Systems is to hand back up to ?500m to shareholders a ter con irming last night it will sell its 20 per cent stake in the commercial aircra t builder Airbus.