The EU has set aside 800 million euros from its 2007-2013 budget with industry committing itself to investing a similar amount in the Clean Sky project.

"There are three main objectives: the reduction by 50 percent of carbon dioxide, halving the level of noise and reducing by 80 percent the level of nitrogen oxide emissions," Marc Vantre, CEO of French conglomerate Safran's aerospace propulsion division, told reporters.

So far 86 organisations from 16 of the EU's 27 countries have joined Clean Sky. They include 54 industries, 15 research centres and 17 universities.

Vantre was confident aerospace firms would come up with cash to fund the programme that will develop demonstration models on the ground or in the air.

"The commitments are there," Vantre said.

The European Commission said aviation accounts for 4 percent of annual greenhouse gas emissions, blamed for global warming.

Last month the EU executive proposed that airlines pay more over time from 2013 for permits to emit greenhouse gases under its emissions trading scheme.

COMPETING WITH AMERICA

Clean Sky's provisional executive committee will need to agree on issues such as the rules of participation and how new technology will be patented and any revenue shared.

"The intellectual property rights issues are important for industry. We are investing our own money so we want to be sure that we can use the technology going forward," said Ake Svensson, CEO of Swedish aerospace company Saab.

"So far we are allocating about 150 million Swedish crowns (US$23.67 million) for taking part in two programmes, the smart fixed wing initiative and green operations, where it's not only about what you fly but how you fly," Svensson said.

Clean Sky is also about ensuring the EU keeps up on the latest technology and can compete with rivals such as the United States, which set up its first aeronautics research and development policy in 2006.