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Robert Peston says BAE-EADS deal 'blocked by German government'

10 October 2012 Last updated at 13:21 BST

Aerospace and defence firms BAE and EADS have decided to cancel their planned merger, the BBC has learned.

The deal was opposed by the German government, BBC Business editor Robert Peston said he had been told.

The decision comes after days of talks between the UK, French and German governments to overcome political objections.

The UK wanted its counterparts to agree to limit their influence in the merged firm in order to maintain BAE's strong working relations with the US Pentagon