Perhaps hurt by recent speculation, it looks like AirTanker are fighting back:
£13bn RAF tanker deal is ready for lift-off - Telegraph 11 Nov 07
Meanwhile, another report in the same newspaper suggests that FSTA could be toast:
MoD in £1bn battle to stay within budget - Telegraph 11 Nov 07
The RAF and Royal Navy look poised to take the brunt of the squeeze with the possibility that projects such as the Eurofighter programme, the RAF's Future Strategic Tanker and the Trident replacement programme could be axed.
.
.
Serious question marks exist over the future of the RAF's Future Strategic Tanker, a new air-to-air refuelling aeroplane, as some of the private companies involved in its production are struggling to raise cash for the project.
Looks like this is all going to get very messy or perhaps it's all part of the final negotiation.