The launch yesterday of the European Airbus superjumbo programme was marred by a transatlantic slanging match. The European Commission said it would retaliate against any possible US action over about $2.5 billion in loans from four European countries for the project.

The financial support in the form of repayable loans from France, Germany, Britain and Spain is being challenged by Washington. US President Bill Clinton warned French President Jacques Chirac at their summit meeting in Washington on Monday that if financing was not on commercial terms, it could create "a serious problem affecting the US-EU relationship". Mr Noel Forgeard, Airbus chief executive, said the aid was in complete compliance with the 1992 agreement between the US and the EU on the financing of civil aircraft programmes.

"Airbus is receiving refundable loans from governments on commercial terms," he said.

The dispute comes as yesterday's formal industrial initiation of the A380, formerly known as the A3XX, sharply intensifies the battle between Airbus and Boeing for domination of the world aircraft market.

The aircraft will have 555 seats compared with the 416 of the Boeing 747-400. It will also create 225,000 direct and indirect jobs worldwide, according to Mr Forgeard.

Airbus is 80 per cent owned by the European Aeronautic Defence and Space company (EADS). It will make its first flight in 2004. Airbus has won 50 firm orders for the A380 and options on a further 42 aircraft.

The threat to Boeing, which has failed to win a single order for its rival offering the 747X, is serious as the company is the largest single US exporter and a vital defence contractor.