Northrop Grumman could not rule out legal action to resolve a dispute with the Pentagon over the competition to build new US military tanker aircraft, a spokesman for the defense group said.

Northrop and Airbus parent EADS accuse the Pentagon of disclosing sensitive price details from their bid for the tanker contract in the last round of competition that could give their rival Boeing an edge in a new contest.

Northrop spokesman Randy Belote said Wednesday the company and its partner, the European Aeronautic Defence and Space Company, were trying to resolve their concerns in talks with the US Defense Department but said legal action would be an option of the discussions failed.

"If we are unable to come to a resolution and we are not provided Boeing's comparable bid pricing information, Northrop Grumman would consider its options to resolve the issue," Belote told AFP in an email.

"Of course, one of the options includes legal action," he said.

Belote added that "our primary interest is to work with our customer to resolve the issue as soon as possible."

Defense officials have rejected Northrop's allegations, saying that disclosing the information did not violate federal regulations and that the details are outdated and not pertinent to the new round of bidding.

The US Air Force's two previous attempts to find a replacement for its KC-135 air refueling tanker have been plagued by scandal, furious lobbying and political controversy.

Northrop and EADS were awarded the contract last year but Boeing managed to overturn the decision on appeal, with federal auditors concluding the competition had been flawed.

A new competition was announced in September to build 179 aerial refueling tankers to replace the aging tanker fleet.

Northrop also criticized the terms of the draft proposal on Wednesday, the Air Force Times reported, with officials saying the competition appeared to be based solely on price while discounting a plane's capabilities.

US officials insist the contest is designed to secure the best aircraft for the best price.

The Defense Department said it had gone to great lengths to ensure the competition was as fair as "humanly possible".

With both sides criticizing the process, it showed that "we may have found the sweet spot" for organizing a contest that was truly impartial, press secretary Geoff Morrell told reporters.

Asked about reports that Northrop might boycott the contest, Morrell said: "I find that extraordinarily hard to believe. This is an extremely lucrative contract and I don't think we have any doubt that there will be a healthy competition to win it."

But EADS chief executive Louis Gallois last week told a news conference in Washington that it was unfair Boeing had sensitive pricing details from the last bidding round.

"The fact that our competitor has a full information on our cost breakdown, and we don't have the same information on our side" was cause for concern, Gallois said.

Both Northrop and Boeing have fierce advocates in Congress, who have already accused the Pentagon of bias in the bidding terms.

After having issued a draft request for proposal and asked for comments from the aviation rivals, the Pentagon plans to release a formal request for bids next month and to award the contract by June next year.

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