UPDATE 3-Canada starts new search for fighters, may still buy F-35

Wed Dec 12, 2012 5:39pm EST
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* Says to look at all available options to replace CF-18s

* Independent panel to be given guidelines for evaluation

* Cost of F-35s, including operating them, would be C$45.8 bln

* Opposition says government misled Canadians

By David Ljunggren

OTTAWA, Dec 12 (Reuters) - Canada scrapped a controversial sole-source plan to buy F-35 jets from Lockheed Martin Corp on Wednesday, saying it will now evaluate all available options for acquiring new fighters.

The announcement is another challenge for the F-35, which has been hit by cost overruns and delays and at $396 billion is the costliest program in Pentagon procurement history.

Canada's Conservative government - stressing it could still buy the F-35 if it turns out to be the best option - will set up an independent panel to look at replacements for an aging fleet of CF-18 fighters, which are due to go out of service by 2020.

"We are pressing the reset button on this acquisition in order to ensure a balance between military needs and taxpayer interests," Defence Minister Peter MacKay told reporters.   Continued...