Britain's aerospace industry lobby group said proposals were being drawn up by the industry that could allow Prime Minister David Cameron and even Queen Elizabeth to use modified Airbus jetliners that double as refuelling planes.

The proposals follow a British media storm after Cameron led a business delegation to Indonesia in a chartered Boeing 747 to oversee the sale of jetliners worth $2.5 billion supplied by Boeing's (BA.N) European arch-rival Airbus (EAD.PA).

Robin Southwell, head of the UK aerospace industry's lobbying association and also head of Airbus parent EADS in Britain, said he would propose the alternative use of the Royal Air Force jets when not needed for refuelling missions.

He compared the choice of airliner for Indonesia to a luxury car salesman turning up in a used Jaguar.

"If you are trying to sell a new Aston Martin to someone and you turn up in a used Jag and say the Aston Martin is the best thing since sliced bread and then drive off in the Jag, it isn't as smart as turning up in the model you tried to sell."

The RAF is leasing 14 Airbus-built Voyager jets which can refuel fighters or carry troops or medical evacuees in a normal cabin. When not needed they can be chartered out and the wing pods removed, leaving a normal-looking jetliner in RAF colours.

A Downing Street spokeswoman said the government always considered various civil and military options when planning travel depending on the size of the group, cost and security.

"If it meets our needs and doesn't conflict with military operations, we would of course look at it, but it is just one of the options," she said.

An EADS spokesman said the same option would be available to Britain's royal family, depending on requirements and protocol.

A Buckingham Palace spokesman said it was too speculative to comment on whether the royal family would consider the plans.

Southwell said using the aircraft would not add any cost.

FIERCE COMPETITION

Cameron's advisers usually charter British Airways or Virgin Atlantic aircraft for foreign travel, but neither airline was willing to give up a plane over the busy Easter holiday period.

Aides picked a 747 with the same instantly recognizable silhouette as Air Force One flown by U.S. presidents -- including a recent Indonesian visit by Barack Obama to secure a record Boeing order 9 times larger than Cameron's Airbus deal.

Airbus and Boeing compete fiercely for aircraft sales worth some $80 billion a year, often with the support of diplomatic lobbying or intervention from government leaders.

The row over Cameron's flight to Indonesia deepened when it emerged that his plane, operated by U.S.-based Atlas Air, was owned by Sonair, an Angolan carrier banned for safety reasons in the European Union.

Britain has long agonised over whether to have a dedicated aircraft for its leaders like Obama's Air Force One or private Airbus jets like those taken to summits by French and German leaders.

After a series of gaffes, Cameron would have to be careful of giving any impression that VIP trips were diverting resources needed by the armed forces.

The RAF refuelling jets have themselves been dogged by controversy since the Ministry of Defence agreed a 10.5 billion pounds deal to lease the 14 modified Airbus A330 aircraft from the EADS-led AirTanker consortium in 2008.

The defence ministry has acknowledged the planes had leakage problems during test refuelling of Tornado jets and threatened compensation claims in the event of delays or extra costs.

Southwell said some teething problems were inevitable, but they were being dealt with and the jets were fit for their role.

(Additional reporting by Michael Holden, Mohammed Abbas; Editing by Matthew Tostevin)

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