Lockheed Martin Corp.'s $276.5 billion F-35 Joint Strike Fighter program, the costliest U.S. arms acquisition project, may be set back by moves in Congress to slow initial production, a top company official said on Wednesday.

Bethesda, Maryland-based Lockheed needs to capture economies of scale to meet a key goal of keeping the aircraft affordable, said Tom Burbage, Lockheed executive vice president and general manager for the F-35 program.

We think we've made the argument (to) the people who make the decision. We really are just in a kind of wait-and-see mode right now, he said at a briefing for reporters.

It's too hard to predict whether Congress will respond to a push by both the company and the Pentagon to keep early F-35 production on track, he said, adding: It's a tough budget year, notably because of Iraq war costs.

Earlier this month, Gen. Charles Davis, the Pentagon's F-35 program manager, told Reuters that curtailing initial production could boost the cost of early aircraft as much as 35 percent - or $12 million to $16 million per plane. A 2002 projection put the price of each F-35 at $45 million for a conventional take-off and landing model, to $60 million for a version designed to land on aircraft carriers.

The family of radar-evading F-35 warplanes is projected to cost $276.5 billion through 2027 in a project being funded by the United States and eight other countries - Britain, Italy, Netherlands, Turkey, Canada, Australia, Denmark and Norway. Israel and Singapore are also involved.

Burbage said Lockheed wanted Congress to fund no fewer than four F-35s in the first year of initial low-rate production and no fewer than 12 the next year, if it rejects the five and 16, respectively, in President Bush's request for fiscal 2007.

A plan in the Senate would delay production by a year, while a move in the House of Representatives would fund four, one less than requested by Bush.

Some congressional staff members fear Lockheed cannot meet its aggressive development and testing schedule - a problem sometimes summarized as buying before flying.

But Burbage said manufacturing was going even better than the company had hoped. Steady production rates were needed so we can be affordable, he said.

Otherwise, he said, the program risked heading into a classic down-spin in which aircraft become more expensive, leading to fewer purchases and yet higher costs.

We're trying to get out of that spiral, Burbage said.

Lockheed foresees overseas sales of 1,500 to 2,000 F-35s or more through the U.S. Foreign Military Sales program over the next 30 to 35 years, he said. The aircraft is to replace aging F-16s, AV-8B Harriers, A-10s, F/A Hornets and British Harrier GR.7s and Sea Harriers.

The F-35 is due to make its maiden flight in November, Burbage said. It wound up its first series of engine runs on Monday, culminating in a test that unleashed 40,000 pounds of thrust, the most ever from a jet-fighter engine.

Key subcontractors are BAE Systems Plc and Northrop Grumman Corp. Two separate, interchangeable, engines are under development by Pratt & Whitney, a United TechnologiesCorp. unit, on the one hand, and a team made up of General Electric Co. and Rolls-Royce Plc, on the other.

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