Boeing suffered another blow on Tuesday with a Pentagon decision to restructure a controversial $100bn contract to modernise the army, after opposition to the deal by John McCain, a senior Republican on the Senate armed services committee.

In recent months, Mr McCain has expressed concern that the army used an unorthodox contracting procedure for the Future Combat Systems contract. The expensive programme is aimed at making soldiers more effective by linking them and their vehicles to a network-based system of satellites, robotic vehicles and weaponry. Mr McCain objected to the so-called “Other Transaction Authority” (OTA) contract, usually used to help small non-defence companies avoid Pentagon red tape, saying it did not include sufficient protections for the taxpayer.