An £800 million contract will see the British army equipped with 148 of the “most lethal” main battle tanks in Europe, the Defence Secretary has announced.

The fleet of fully-digitised Challenger 3 tanks will be produced at the Rheinmetall BAE Systems Land (RBSL) plant at Telford in Shropshire and will replace the existing Challenger 2 vehicles which have been in service since 1998.

Some 200 jobs, made up of 130 engineers and 70 technicians, will be created at the Telford site, the Ministry of Defence (MoD) said.

Exercise Saif Sareea 3
A Challenger 2 main battle tank (Ben Birchall/PA)

A further 450 roles will be established as part of the wider supply chain across the West Midlands, Glasgow, Newcastle upon Tyne and the Isle of Wight.

It comes as the Government announced in March that a third of the army’s 227 Challenger tanks would be scrapped as part of a major military overhaul.

The new vehicles, described by the MoD as the “most lethal tank in Europe”, will be able to travel at up to 60mph and feature upgraded suspension to improve accuracy while firing on the move.

They will be fitted with an automatic target detection and tracking system to identify enemies, along with new thermal long-range cameras.

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Ben Wallace described the new technology as ‘pioneering’ (Ian West/PA)

Defence Secretary Ben Wallace said: “This represents a huge shift in the modernisation of our land forces through the increased lethality of Challenger 3.

“This pioneering new technology allows us to deliver immense warfighting capabilities in battlespaces filled with a range of enemy threats.

“The £800 million investment will also create hundreds of highly-skilled jobs across the country ensuring our soldiers benefit from the very best of British engineering.”

The army is expected to receive the first tanks by 2027 and the full fleet by 2030.

As part of the defence review announced earlier this year, the army’s size will be reduced to 72,500 soldiers by 2025 as the focus shifts to drones and cyber warfare.