BAE Systems is to supply the UK's Ministry of Defence (MoD) with munitions at a starting value of £2 billion, in a move that will create hundreds of jobs in the Crewe area.

The Munitions Acquisition - the Supply Solution arrangement between the MOD and BAE Systems could grow to more than £3 billion over the coming 15 years.

BAE Systems notes that the deal will see a guarantee of secure ammunition supplies to UK troops and will sustain some 1,700 jobs.

"[The arrangement] contracts for essential capability - retention of facilities and specialist skills - not just product," BAE Systems land systems managing director David Allott said.

The Munitions Acquisition - the Supply Solution agreement will supply roughly 80 per cent of the UK armed forces' so-called general munitions, which include small arms, medium-calibre ammunition, tank ammunition, mortar bombs and artillery shells.

Minister for Armed Forces Bob Ainsworth noted that it was "absolutely essential" to have a guaranteed high-quality ammunition source in the UK and that the contract would provide that.