Costing more than 100 billion euros ($120.4 billion), the Future Combat Air System (FCAS) brings together Germany, France and Spain.
Dassault Aviation, Airbus and Indra are involved in the scheme to start replacing France’s Rafale and German and Spanish Eurofighters from 2040.
France, represented by Dassault, is seen as particularly sensitive about access to its nuclear-capable supply chain. Germany, whose interests are represented in the project by Airbus, wants an equitable industrial share, the sources said.
When Spain formally joined last year it further complicated the task of parcelling out work, with two of seven topics seen deadlocked.
Before moving ahead, Germany aims to gain concessions from France, insiders said, adding Berlin would like to be able to use technologies co-developed with Paris for its own projects.
One French source said Germany also wanted access to know-how developed purely in France. A German source denied this.
Disagreements run so deep that there are proposals to build two demonstrators instead of one, two sources told Reuters. Each would likely highlight different aspects of the FCAS project, which is designed to combine manned and unmanned warplanes.