The Indian government has cancelled a £466 million order for 12 AW10 1helicopters from AgustaWestland, which employs 3,300 people in Yeovil in the UK. Its defence ministry said: “The Government of India has terminated the agreement with immediate effect . . . on grounds of breach of the pre-contract integrity pact.” India had already suspended the contract in early 2012.

Education Minister David Laws, the MP for Yeovil, said: “AgustaWestland has demonstrated its resilience over many years, based on the outstanding quality of the helicopters that it makes. I expect the company to go on selling its products all over the world and to show that this setback can be overcome.”

Giuseppe Orsi — former head of AgustaWestland’s parent firm Finmeccanica — is on trial in Italy on fraud and corruption charges. Bruno Spagnolini — the former chief executive of AgustaWestland — is also on trial, while former Indian air force chief SP Tyagi faces charges in India. All three have denied any wrongdoing.

The Indian government is said to have already paid 45% of the contract price and taken delivery of three of the 12 aircraft. Three more were completed before the contract was suspended but were not delivered, while the remaining six are thought to be close to completion.

Pictured is an AW101 helicopter which was used in the recent James Bond film Skyfall.