PN,
My understanding was that Sir Dick Evans (then BAE Chief Executive) threatened to pull out of the contract at 9 (or possibly 13) aircraft because they weren't going to make any (by which he presumably meant "enough") money if the were forced to go to 21 (or 24) aircraft.
HMG / MoD rolled over. It will be very interesting to see the files from MoD and HM Treasury from a decade ago idc when this fiasco was playing out.
I have always favoured the MoD buying the best kit available for the task in hand, irrespective of manufacture. If we then have to compromise and buy British for "industrial policy" considerations, then the difference in cost and capability should be paid for by BIS (nee DTI). I strongly suspect that if they had to pay the bill (for what is after all a privatised industry) then the number of "critical" cases would decline rapidly.
S41