Europe needs to co-operate on the next generation of military drones or it will repeat costly divisions which led to rival combat jets competing for the same orders, aerospace group EADS warned on Sunday.

The warning on the eve of the Paris Air Show follows a decision by Britain and France to push other defense companies into working on an armed drone, which could leave an alternative project in which EADS is involved out in the cold.

We are not pleased by the development that we have two potentially competing projects in Europe, where obviously Europe is not a position to come up with 300 million euros ($425 million) for the next few years to develop one project, Stefan Zoller, head of EADS' defense and security unit Cassidian, said.

EADS has spent years developing the Talarion unmanned aerial vehicle at its own expense in the hope of winning an order from the project's instigators France, Germany and Spain.

However, France's Dassault Aviation and Britain's BAE Systems have stepped up plans for their own drone under a Franco-British defense pact signed last year, provoking anger and frustration from EADS.

Why abandon such a project... to redo it all again? From my perspective, it's ridiculous, Zoller told journalists.

We are ready to go, he said. It's a pity that what you see on the European side, again, is potential competition that will delay the execution of such programmes.

France pulled out of the Eurofighter joint fighter jet programme in 1985 to work on its own project -- the Rafale, built by Dassault. The two combat planes are competing head to head for an $11 billion contract in India.

Although EADS owns almost 50 percent from Dassault, inherited from the French government, it has no sway over the company and its fighters jets are fierce arms market rivals.

The Rafale was conceived as a purely French military project as a gesture of national sovereignty but France has since rejoined the NATO command and analysts say economic conditions mean no nation can now afford to build a fighter alone.

Current drone developments could pave the way for a future generation of fighter jets, which could be unmanned.

Zoller called on France, Germany, Spain and Turkey to come up with the 300 million euros that it needs to get a prototype of the Talarion in the air for 2014.

EADS has previously threatened to stop working on Talarion if would-be purchasers do not share some of the research costs.

Dassault said earlier this month its Telemos drone could be ready to enter service in 2016, provided French and British ministers authorize the start of the programme.

Zoller said once EADS's own protoype was running, there could be an opportunity for France and the UK to join in with the Talarion and that he could foresee a Talarion customised to British or even Anglo-French requirements.

However the Talarion has been criticised by military planners for its lack of weapons as European nations seek to fill a gap in capacity offered by U.S.-supplied Predators.

Zoller said the Talarion could be used in numerous missions. (Additional reporting by Cyril Altmeyer, Editing by Tim Hepher)