EADS' Airbus A321 planes will be part of the "eye in the sky"

The alliance said it aimed to sign a contract for the "eye in the sky" programme - which is expected to enter service in 2010 - by spring next year.

Under the deal, the group will supply Nato with a system that uses aircraft, unmanned drones and ground systems.

The deal is though to be worth up to four billion euros ($4.9bn, �2.7bn).

Nato said the new equipment "will be essential enabling capability for the Nato Response Force and will provide... an invaluable Eye in the Sky".

It added that the system would gather information about what was happening on the ground during peacetime, crisis or war.

EADS Airbus A321 planes will be among those provided as part of the surveillance system.

Good news

Northrop Grumman, General Dynamics Canada, French defence firm Thales, Spain's Indra and Italy's Galileo Avionica were among the companies in the winning EADS-led consortium.

A spokesman for EADS - the European Aeronautic Defence and Space Company - in Munich said: "We are pleased with this decision."

He declined to give financial details but said further information would be released next week.

US rival Raytheon had led another consortium bidding for the contract. That included Siemens and Alenia Marconi Systems - a joint venture between the UK's BAE Systems and Italy's Finmeccanica.

The contract is further good news for EADS - home of the Airbus passenger jets - which has recently pulled ahead of US rival Boeing for the first time in its 30-year history.

Last month, the firm revealed it had returned to the black in 2003, unveiling net profits of 152m euros ($188m; �102m) for the year, driven by a late surge in deliveries.

EADS, along with other aerospace companies, had suffered in the wake of the 11 September 2001 US terrorist attacks and was driven into the red in 2002.