FIRMS in the North-Easts £2bn defence sector should continue to maintain good business despite fears raised by Government spending cuts, a leading industry figure said.

Robin Fox, managing director of Northern Defence Industries (NDI), was speaking after Petards Joyce-Loebl (PJL) yesterday revealed it is to work on the Ministry of Defence's £300m Puma Life Extension Programme.

The Gateshead firm will spend around a year on the contract to upgrade and programme the helicopters countermeasures, the defence system it uses to ward off missile attacks.

Mr Fox, whose organisation represents more than 200 defence contractors across the region, said: "It is great news that a company in the North of England is winning these hi-tech projects."

Despite cutbacks defence spending is still set to run into billions this year and Mr Fox believed North-East firms in the sector, which supports around 24,000 direct and indirect jobs in the region, could benefit.

He said: "There has been an awful lot of negative publicity about the defence market and defence spending over the last few months and frankly a lot has been overplayed.

"We are going to be cutting defence spending but we will still be spending billions of pounds every year on defence equipment and some of our companies across the North of England are very well positioned to maintain good business."

Mr Fox said that although nobody knew the exact figure, UK defence spending this year was likely to be in the region of £16bn on both new equipment and repairs or maintenance of existing stock.

He added: "That may drop to £14bn or even down to £13bn but five years ago we were getting excited about it possibly being £12bn."

The Puma programme, initially announced in 2009, is intended to prolong the life of the helicopters, used to transport troops.

A spokesman for Petards said the project would help protect jobs at the firm, which employs around 100.

He said: "It is great when we win these. It will help keep us healthy.

"The project itself will take a year and allow the helicopter to remain in service for another 10 years.

"We have been working with the MoD for almost 60 years, we have a good relationship and trust built up over those decades which stands us in good stead for these projects.

"The same way as we get business from the MoD and the bigger prime contractors like BAE Systems, where possible we use suppliers in the North-East so it does feed down from us."

The countermeasures system manufactured by the Gateshead firm dispenses chaff and flares, enabling the Puma to survive infra red or radio frequency missile attacks

Petards electronic warfare manager, David Jamieson added: "These upgrades will ensure the aircraft is fully equipped to defend itself when in active service, and we are delighted to be working on the project."

Up to 30 of the helicopters, which first entered service in 1971, will be upgraded, with the first due to re-enter service by the end of next year.