The first Boeing 787 should have its first test flight in 2007

Qantas said it had ordered 45 twin-aisled 787 planes from the US aircraft maker, with options to buy an additional 20.

The airline's decision is a blow to Boeing's arch European rival Airbus, which had been pushing Qantas to choose its A350 passenger jet.

Qantas said it expected to take delivery of its first 787 jet in 2008.

The Australian airline said it could eventually buy up to 115 of the long-range aircraft.

Modern fleet

The Qantas deal is the biggest single order so far for the 787, which has yet to come into service.

Boeing has staked much of its future on the success of the jet. It says the 787 will be 20% more fuel efficient than similar mid-sized planes.

Qantas said the first of its 787 aircraft would be used by its budget Jetstar carrier.

"This plan will give us a modern fleet offering maximum flexibility, lower seat-mile costs and greater fuel efficiency," said Qantas chairman Margaret Jackson.

Boeing and Airbus have secured more than $100bn in orders so far this year, as airlines move to replace their fleets with more fuel-efficient jets.

Earlier this month Airbus, which is co-owned by European aerospace giant EADS and British defence firm BAE Systems, won a $10bn order to sell 150 of its smaller A320 planes to China.

Qantas said the selection process for the engines used to power its new 787 aircraft would begin in February 2006.

British engine maker Rolls-Royce and General Electric of the US are competing for the contract, which will eventually account for about 20% of the total cost of the aircraft.