The Government of Trinidad and Tobago is considering cancelling a contract awarded to BAE to acquire three drug-busting patrol ships.
The company signed the deal to provide the Caribbean nation with patrol vessels and ancillary support in April 2007.
It is estimated that the move will cost the company £150m, according to the Telegraph.
The first patrol ship is in the final stages of delivery to the Trinidad Government, while the second would be ready next month.
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The Trinidad media said the government had become frustrated by the delays and had already spent millions of pounds training would-be sailors to serve on the ships.