LONDON - China will sign a contract to buy aircraft from European planemaker Airbus during this week's visit to Beijing by Tony Blair, the prime minister's spokesman said on Sunday, Reuters reported.

The spokesman said the contract would involve "not an insubstantial" amount of money.

The deal will be part of a batch of contracts worth around 2 billion pounds due to be signed between UK firms and China Advertisement and India during Blair's four-day tour of the two countries.

He is going for EU summits with both nations at a time when Britain holds the six-month rotating presidency of the 25-member bloc.

Blair hopes to strike deals on trade, investment and climate change at the China meeting which takes place against the backdrop of a spat of textiles exports.

Iain Grey, managing director of Airbus UK, will accompany Blair in China, which is among the fastest-growing air travel markets.

The number of routes between China and Europe is expected to rise to 114 by 2023, compared with 26 routes in 2003, a Boeing study shows, while there were 45 routes linking China and Japan last year compared with nine in 1990.

More than 40 other UK business leaders are also accompanying Blair, from companies including British Telecom, British American Tobacco, Barclays Capital and GlaxoSmithkline, Blair's spokesman said.

The EU is China's No. 1 trading partner and China is the bloc's second largest after the United States, while UK exports to China are growing at the fastest rate among EU countries.

In India, the cabinet last month set up a panel to hold final talks with Airbus for the purchase of 43 aircraft.

Finance minister Palaniappan Chidambaram said then the negotiations on the $2 billion (1.1 billion pound) deal to acquire aircraft for state-run domestic carrier Indian Airlines could be wrapped up in September.

Indian airlines have been modernising their fleets and expanding as their government has deregulated a sector once straitjacketed by red tape. India's government said in May it expected airline industry growth to surge 20 percent a year.

In June, India's largest domestic airline Jet Airways said it would buy 10 Airbus aircraft with options to buy 10 more in a deal worth about $1.5 billion.

In addition, Jet's domestic rival Kingfisher Airlines said it planned to spend about $2.5 billion for "multiple wide-bodied aircraft" from Airbus, including its mammoth 555-seat A380 model, the world's biggest airliner.

(Reuters)