European nations gave formal backing to a 3.5 billion euro ($5 billion) rescue deal for Airbus's A400M military lifter on Thursday, ending a drawn-out battle to save Europe's largest defence project.

The bailout from seven Nato nations was the result of an intense political battle to prevent the original 20 billion euro project collapsing under the weight of cost overruns and delays with the loss of 10,000 jobs.

"Challenges are here to overcome and today we can say this challenge has been concluded," Airbus Military chief Domingo Urena said.

The project for the A400M, built in Seville, will support 40,000 jobs in Europe by 2016, with the first aircraft delivered to France between the end of 2012 and early 2013.

Civil certification will be achieved by year-end, Urena said. – Reuters