It's a good story, but.... the Torygraph is implying that some great disaster has struck. FOAS/FOAC was a projected capabilityrather than hardware. The implication is that FOAS would have been a British built wunderfighter - but would it? Since FOAS would have replaced Tornado, the probability of collaboration must have been high. It seemed to be accepted that the last all British fighter had been delivered in the form of the last SHAR 2 a couple of years ago.
As it is, developments of JSF or Eurofighter with all-singing all dancing weapons could probably do the job in the medium term (through to about 2030). This seems to be more of a 'pushing thinking right' process than the final, unequivocal decision implied.