BAE Systems has won a deal with the US government to supply mine-protected vehicles, easing concerns about the prospects for its armoured vehicle business in the event of a troop reduction in Iraq.

Britain’s biggest defence manufacturer beat four other bidders to win an agreement worth a potential $2.3bn (£1.2bn) to supply the defence department with up to 2,500 bomb-disposal vehicles by 2015. An initial $20m order of nine vehicles will be delivered later this year.