German defence ministry decides to buy MEADS from MBDA - newspaper

BERLIN (Reuters) - Germany's defence ministry has decided to buy MEADS, a successor to the Patriot missile defence system developed by European defence group MBDA and U.S. weapons maker Lockheed Martin Corp, German newspaper Sueddeutsche Zeitung reported on Friday.

The newspaper, which did not identify its sources, said the Lockheed-lead MEADS consortium had beat out Patriot manufacturer Raytheon, which had offered a modernised version of its system, to build one of the biggest and most expensive armament projects of the next decade.

The German defence ministry declined to confirm or deny the report.

"The decision will, as we have announced, be made by the end of the second quarter," a spokesman said. "We continue to be in talks with all manufacturers."

A U.S.-based source familiar with the competition said he believed the German media report was "absolutely incorrect" and no decision had been made by the German government.

Officials at Raytheon and Lockheed had no immediate comment.

The United States, Italy and Germany spent several billion dollars developing MEADS over the past decade as a successor to the Patriot system, but Washington decided in 2012 to withdraw, citing budget cuts.

The decision on the system is considered one of the most important armament choices of this legislative period and the order, for which around 4 billion euros are still payable, is the first big independent procurement decision for Defence Minister Ursula von der Leyen, the newspaper said.

(Reporting by Michelle Martin and Sabine Siebold; Editing by Grant McCool and Ken Wills)