Just had a surf around to look for any news... Neither the MOD nor the Airtanker websites have been updated for about 6 months. Although the Airtanker site suggests that the contract should have been signed by the end of 2007 (
http://www.airtanker.co.uk/business-timeline.htm) and that 'Aircraft development', 'Conversion and Cert', 'New hangar', and 'New trg school' will be complete by 2010 - which I make now less that 2 years away.
Quite clever how they have put the a/c delivery on the graphic - if you hover over the 'Tanker deliveries' tab a little window opens with the date - 2034.