...the E-3's are mostly funded by NATO...
No they're not. They are the UK's contribution to the NATO AEWCF and costs lie with the UK.
Regarding XV249, it was converted to R1 configuration via 'Project Anneka' (remember the TV programme 'Challenge Anneka'?!) following the loss of 'Damian' (aka XW666) in the Moray Firth on 16 May 96. According to open sources, the conversion of 249 began on 27 Dec 96 and it first flew as an R1 on 11 Apr 97.
Regards,
MM