By Wyre Davies BBC Wales correspondent

Project Red Dragon would repair all the RAF's aircraft

The internal report - which has been seen by the BBC - proposes pulling the plug on a high-profile scheme to repair military jets at RAF St Athan in south Wales.

The future of Project Red Dragon - and 3,000 Welsh jobs - finally seemed secure in February this year when the Defence Aviation Repair Agency (Dara) confirmed it would go ahead with a �77m aircraft maintenance centre near Cardiff.

Armed Forces Minister Adam Ingram had assured workers there, and in plants in Scotland and England, that the ground-breaking scheme to refurbish and maintain RAF planes had landed government approval.

But the BBC has been told by senior sources within the MoD that officials in the department intend to renege on the project.

However, an MoD spokesman said they were still committed to the project.

"Ministers stand by their commitment to Red Dragon and we are hardly going to ride roughshod over the investment we are making at St Athan," he said.

Nonetheless the BBC understands that work has already been diverted from Dara and is being carried out by the RAF at its own bases - going against original plans to send them to the planned aviation park at St Athan.

The planned "super-hangar" would cater for 47 fast jets

Not only does this contradict earlier assurances by Mr Ingram but it threatens the very existence of Dara - set up in 1999 as one of the government's high-profile public-private partnerships - and its 4,000 employees in the UK.

Dara's future could only be guaranteed by Project Red Dragon which included the building of the aerospace industry park at St Athan to include a "super-hanger" which would have 47 bays to allow work on military fast jets.

It was hoped that, once underpinned by the MoD contracts, civil aviation companies and other aviation businesses would use the services at St Athan, potentially further jobs.

The fortunes of Project Red Dragon carry with them 2,100 jobs at St Athan, and 900 in Sealand, Flintshire, at the Dara plant specialising in aeroplane electronics.

John Smith: Blames "vested interests" in the RAF

John Smith, the MP for the Vale of Glamorgan, said he was "absolutely astounded" by the possible cuts.

Union spokesman Jack Dromey said it would be "outrageous" for the MoD to back away from the scheme now it had been given the government's blessing.

An MoD spokesman said an internal review had been completed but Armed Forces Minister Mr Ingram had not yet read it.

Economic Development Minister Andrew Davies added that the Welsh assembly remained comitted to the project.