Britain risks losing £5bn of defence contracts if a planned EU ban on palm oil goes ahead, it has emerged.
The UK is in competition with France for £5bn worth of defence contracts with Malaysia, as both countries bid to make fighter jets and other military equipment.
However, a ban on the controversial oil is gaining momentum as it moves through the EU, as it a huge driver of deforestation which contributes to climate change.
The European Parliament has already banned the substance and the Council of Ministers is set to follow suit.
Mah Siew Keong, Malaysian minister hit out at the EU ban and threatened to cease trading with Europe if it continued.
Mah said recently: “If these hate campaigns and discriminatory policy against palm oil were to go on, we can also retaliate. Don’t expect us to continue buying European products.”
If Britain wins the contracts it could help safeguard 20,000 jobs, however the French government have promised to stop the ban getting full EU approval in order to persuade the Malaysians to offer them the lucrative contracts.
Mah is due to travel to the UK this week but his arrival has already caused a rift in the Cabinet.
Environment Secretary Michael Gove supports the ban on palm oil, but Defence Secretary Gavin Williamson has been campaigning for more support for defence jobs.
A British defence source told the Sun on Sunday: “We will always do whatever is in the best interests of supporting our defence exports.”