General Electric Co and Rolls Royce are dropping their effort to build an alternate engine for Lockheed Martin Corp's F-35 joint strike fighter, giving up on what they said could be a $100 billion (64.1 billion pound) market.

The decision to end their funding of the project beyond 2011, which the companies announced on Friday, is a boost for United Technologies Corp's Pratt & Whitney unit, which builds the engine used in the F-35's early production models.

The Defense Department earlier this year cancelled funding for the second engine. That led GE and Rolls Royce to say that they would fund it themselves for the rest of this year and fiscal 2012.

The decision, reached jointly by GE and Rolls-Royce leadership, recognizes the continued uncertainty in the development and production schedules for the JSF program, the companies said.

The $382 billion Joint Strike Fighter project is under tough scrutiny as the Pentagon looks to find $489 billion in budget cuts over the next decade. On Thursday, a published report said the Navy admiral who runs the program is calling for slower production until airframe problems can be corrected.

In a statement on Friday, Pratt said it remains focused on lowering engine costs and making sure the flight-test program is successful. We are grateful for the continued confidence and support of our DoD customer for the F-35 engine, the company said.

GE, which had argued that having a choice of two engine suppliers would save money over the long run, said the companies spent tens of millions of dollars on the project in 2011. Since 1997, the government handed out about $3 billion for alternate engine development, GE said.

(Reporting by Jim Wolf in Washington and Karen Jacobs in Atlanta, editing by Dave Zimmerman)