WASHINGTON – Britain has threatened to shut American firms out of the British defense market in response to American complaints about the channeling of billions of dollars in loans by European governments to civil aircraft maker Airbus.

The British threat was made to the chairman of Boeing, America’s largest aerospace company, during meetings last week in London where he was pressing his company’s case against European subsidies to Airbus, Boeing’s main competitor.

Boeing has intensified in recent months its campaign to persuade European governments to stop providing what it views as unfair subsidies to Airbus for the development of new aircraft, including the A380 Super Jumbo.

Britain’s defense procurement minister, Lord Bach, told the Boeing chairman, Harry Stonecipher, that American companies risked having the doors closed on them by Britain unless Congress lifts rules prohibiting American arms companies from passing on technical-weapons details to British firms buying their products.

The conflating of American objections to the massive public subsidies to Airbus with the long-standing Anglo-American quarrel over congressional rules barring the sharing by American firms of sensitive defense information represents an escalation in both disputes and is prompting rising alarm about the possibility of a transatlantic trade war.

According to Joel Johnson, vice president of international affairs at America’s Aerospace Industry Association, the two disputes are separate and he doubts that any linkage will be maintained by London.

Following meetings last month with Boeing executives, President Bush indicated that he was prepared to pursue a high-profile international trade case and to file a formal complaint with the World Trade Organization over the European loans to Airbus. “I’ve instructed the U.S. trade representative, Bob Zoellick, to inform European officials that we think these subsidies are unfair and he should pursue all options to end these subsidies, including bringing a WTO case if need be,” he said.

European Union Trade Commissioner Pascal Lamy dismissed the threat, claiming that Mr. Bush is playing “election year politics.”

American government and European Commission officials are set to resume talks in two weeks over the Airbus issue, but the British threat to exclude American firms from their defense market is likely to “prove unhelpful,” according to U.S. officials.

Britain has long disliked the congressional rules prohibiting American firms from sharing with clients technical details of weapon design. British companies are not barred by their government from passing on technical weapons data to American companies. “I was told in no uncertain terms that unless an agreement can be reached the U.K. will stop buying U.S. equipment. If that happens, then everybody loses,” said Mr. Stonecipher.

American defense firms are sympathetic to the British position. “Given their role in Iraq and given the fact that the British revamped their export control laws to make them tighter at our behest, there is deep frustration in London that there has not been a quid pro quo in terms of lifting the congressional rules. What the British are saying is that if we are not being treated as a partner, then we will not treat you as suppliers,” said Mr. Johnson.

Airbus and Boeing have for decades attacked each other over government subsidies. A 1992 agreement between the European Union and America limiting government support to 33% of aircraft development costs was meant to have ended the dispute. The agreement also limits the amount of indirect aid given to large aircraft makers.

But the issue resurfaced last year when Airbus for the first time sold more aircraft than Boeing. Airbus says it has complied with the 1992 agreement and that the $3.2 billion in repayable launch aid it has received for the A380, including $950 million from the British government, does not break the agreement either.

Boeing believes the 1992 agreement has outlived its usefulness with Airbus now being a successful business rather than a start-up. The American company claims it has lost market share as a result of the support its European rival gets. “I don’t think you could develop five aircraft in ten years (as Airbus had done) without launch aid,” said Mr. Stonecipher. Boeing develops a new aircraft every decade.

American trade representative Zoellick agrees that the success of Airbus should disqualify it from any further government subsidies. “If there were ever justification in 1992 or earlier for a start-up industry, that has long been overcome,” he said recently. According to Mr. Stonecipher, Airbus views state aid as “almost an entitlement.”

The Boeing chairman claims the figures the Europeans and Airbus cite are inaccurate and he alleges that an average of 75% of the research and development costs for each of Airbus’s new planes in the early 1990s was provided by state aid.

Airbus has countered that Boeing receives its fair share, too, of subsidies and favorable loans and points to the funding provided by the Japanese government and Japanese companies for the launch of Boeing’s new mid-sized airliner, the 7E7. The European firm also says that Boeing gets plenty of indirect government aid through defense contracts awarded by the American government. Boeing officials say that Airbus also benefits from defense contracts awarded to its parent companies, European Aeronautic Defense and Space Co. and BAE Systems, which received $23.7 billion in 2003,roughly the same amount the American company received from government defense contracts.

American trade officials told The New York Sun that they believe Britain raised the issue of congressional rules prohibiting sharing technical-weapons data as part of a negotiating ploy in the upcoming talks about Airbus.

American officials believe, though, that Britain will continue to pursue the lifting of congressional rules prohibiting the sharing of technical-weapons data regardless of the Airbus issue.

“The Europeans don’t want the Airbus issue to go to the WTO because they will be found to have violated international trade rules,” argued an official.