For Enders, who in the months before the BAE talks had come under acute pressure from Berlin to move prized Airbus research work to Germany from France, the proposed deal with BAE was a last-ditch attempt to free EADS from the yoke of government influence.

The deal’s failure is likely to bring the opposite result. Germany, emboldened by its growing stature in Europe, looks set to push ever more aggressively for jobs, technological know-how and management influence - as the French did to detrimental effect in the early years of the firm.

Insiders say this could have disastrous consequences for the company. Some fear it will also tarnish ties between Berlin and Paris at a time when Merkel and French President Francois Hollande must find common ground to solve the crippling euro zone debt crisis.

“The fight that is happening now over Airbus is a grave threat,” said an industry veteran with close ties to EADS. “Going back to a situation where you have to argue at the board over every industrial decision would be a disaster. That could really kill the company.”

In the aftermath of the deal’s collapse, deep-seated tensions between Paris and Berlin have been exposed. The two are already squabbling over Merkel’s plans to centralize control over European budgets. Germany is also increasingly skeptical about Hollande’s readiness to reform the French welfare state.

Enders declined to be interviewed for this story. The German government, Airbus and EADS also declined comment.

POWERFUL SYMBOL

EADS was formed in 2000 through a merger of France’s Aerospatiale-Matra and Germany’s Dasa, together with Spanish aerospace assets.

The deal, unveiled by French Prime Minister Lionel Jospin and German Chancellor Gerhard Schroeder in the border city of Strasbourg, was hailed as a breakthrough for the fragmented European aerospace and defense sector.