Prospect, representing the 9,000 employees of QinetiQ, warned that selling QinetiQ in the bid to generate quick profits will leave the organisation vulnerable to asset stripping and the break-up of prestigious defence research projects.

Prospect national secretary for defence, David Luxton, said: "By allowing QinetiQ to be sold to the highest bidder in a trade sale, the pursuit of company profits will be put ahead of longer term defence considerations.

"QinetiQ is at the cutting edge of defence technology; is an essential part of the UK's defence capability and is in danger of being broken up as a consequence of this announcement.

While the government have ruled out bids from the defence manufacturers or "undesirable" foreign bids, it will be powerless to stop the break-up of QinetiQ and will have difficulty preventing a subsequent onward sale – despite the temporary retention of a golden share.

"QinetiQ is an integral part of the defence capability and, as such, should remain fully owned by the government within its existing commercial framework."