A Lostock company bidding for a £150m defence contract faces a nervous wait while government defence chiefs assess how their weapons performed in Iraq.

MBDA Missile Systems had hoped to hear by the end of this month whether they had been successful in winning the contract to build Precision Guided Bombs for the RAF which would secure around 400 jobs.

But Defence Procurement Minister Lord Bach will now look at how well MBDA's existing missiles worked during the war and consider a bid by US competitors Raytheon - who also had equipment on show in the Gulf - before they make a decision.

Business development manager Ian Metcalf said: "We have had a slight delay in the process which means that we will now have to wait for a few more weeks while the Defence Procurement agency looks at how we performed in the Gulf.

"Most MBDA equipment performed superbly during the war, especially the Storm Shadow missile system. But we need to remember that Raytheon also had a large amount of high profile equipment used in the war.

"We had expected that the decision would be taken at a low level, but it now looks as though the process will be a bit more high profile."

The Ministry of Defence will examine the firm's performance along with its customers, including the RAF.

Last month MBDA opened a new factory on Wingates Industrial Estate, near to their existing plant in Lostock, which will build the navigation and control system for the weapon with production due to start early in 2005.

But if the company fails in its bid, part of the new plant will remain redundant.

MBDA have been backed by Bolton West MP Ruth Kelly who has lobbied Government defence chiefs urging them to award the contract to the firm.

Twelve months ago factory chiefs were celebrating MBDA being awarded a £220 million missile order to supply the JERNAS short range air defence system to the Malaysian government.

And last December it was announced that the world's most effective air-to-air missile would be made at Lostock after the Ministry of Defence awarded a £1.2 billion contract to a UK consortium led by MBDA.

The PGB system will initially be carried by the RAF's Harriers and Tornados but it will also be compatible with Joint Strike Fighters when they are introduced in the future.