ISRAELI arms giant Elbit Systems has lost two lucrative contracts with the Ministry of Defence following a two-year campaign by Palestine activists against the firm. 

Defence Minister Alex Chalk confirmed that Elbit is no longer working on the Royal Navy’s Dreadnought crew training programme just seven months after it was selected to deliver the £160 million contract.

The ministry is also in discussions to “negotiate the departure” of Elbit from its Project Selborne contract, worth £123m, which was meant to run for 12 years.

News of the cancelled contracts coincided with Elbit’s share prices dropping 18 per cent in November, according to the company’s figures. 

Palestine Action, which has been targeting Elbit sites across Britain for over two years, described the loss of the contracts as “a huge blow” to the firm, which supplies weapons to the Israeli military. 

The information came to light in an answer to a written parliamentary question submitted by shadow defence secretary John Healey last month. 

Responding, Mr Chalk said the contracts had not been cancelled because of any “specific issues” with Elbit Systems or “any wrongdoing on their part,” saying that the decision was instead the result of “applying revised operational sovereignty standards for the UK’s highest priority capabilities.

“Elbit Systems UK remains an important and trusted partner across a range of other contracts in defence,” he added. 

But global arms expert Andrew Feinstein questioned the government claims. 

“The loss of these contracts is a major crisis for Elbit and raises questions about the future of the controversial company in Britain,” said Mr Feinstein, who was an African National Congress MP in South Africa when Nelson Mandela held office. 

“The government claims that it has happened as part of a ‘sovereignty’ drive, but the reality is that many other foreign defence companies continue to play vital roles as suppliers of equipment and services to the UK’s armed forces. 

“I strongly suspect that they have lost these contracts as a consequence of the direct action group Palestine Action having so successfully revealed the brutal reality of Elbit’s gross human rights abuses, especially in enforcing the illegal occupation of Palestine by Israel.”

Two Elbit sites have closed down since Palestine Action began its campaign of direct action against the firm.