UPDATE 2-Italy to join Britain's Tempest fighter jet project

(Adds defence secretary comment, background)

LONDON, Sept 11 (Reuters) - Italy will work with Britain on its planned Tempest fighter plane programme, Britain's defence ministry said on Wednesday, in a boost to its proposed replacement for the Eurofighter Typhoon programme.

Italy joins Sweden in agreeing a pact to co-operate with Britain on fighter jets as the UK looks to get Tempest off the ground and give it an edge over a rival Franco-German project.

"I'm looking forward to working with Italian and Swedish counterparts, as well as others, to put the Tempest programme into hyperdrive," Britain's Defence Secretary Ben Wallace said in a speech at the Defence and Security Equipment International (DSEI) arms fair in London

The agreement between Italy and Britain, which also to deepen the countries' air combat relationship, covers existing programmes such as Typhoon and F-35, as well as the planned next-generation Tempest.

Britain last year unveiled plans for a fighter plane and cohort of drones named Tempest, and Sweden said in July that it could join UK fighter project.

BAE Systems, Britain’s biggest defence company, UK engine maker Rolls-Royce, and the UK arms of Italian defence firm Leonardo and European missile maker MBDA have been working on the development of Tempest, meant to eventually replace the Eurofighter Typhoon from 2040.

On Wednesday those UK defence firms signed a statement of intent with Elettronica, Avio Aero and the Italian divisions of Leonardo and MBDA that the Italian firms would join the project.

Leonardo Chief Executive Alessandro Profumo said that the agreement meant that firm's Italian unit can work to supply aeronautics capabilities as well as the electronics that the UK division was already working on.

Last year's Tempest announcement raised questions about the future of European defence co-operation as France and Germany pursue their own air combat programme to meet growing threats.

European nations face a combination of security threats and budget constraints that have spurred competing alliances as the region's fragmented defence industry vies for leadership and a slice of future spending on any new pan-European fighter.

Analysts say it is unclear whether Europe can afford more than one fighter programme in future rather than the current three - the French Rafale, Swedish Gripen and multinational Eurofighter, which includes Britain.

"What is key is to have a very successful Tempest programme. For a taxpayer, to have one is better than to have two," Leonardo's Profumo told Reuters when asked about the feasibility of there being two European fighter projects.

"I am very respectful also of the Franco-German programme."

(Reporting by Alistair Smout; additional reporting by Francesca Landini in Milan; editing by Giles Elgood and Louise Heavens)