By Doug Cameron 

The Pentagon said Tuesday that it would continue funding work on a new military rescue helicopter, paving the way for a potential contract award later this year to sole bidder United Technologies Corp. that could eventually be worth more than $10 billion.

The fate of the combat rescue helicopter program remained in limbo until late Tuesday afternoon after its omission from the Pentagon's fiscal 2015 budget request published earlier in the day, only for a senior defense department official to reveal that the project would continue with prior-year funding.

The last-minute reprieve for the helicopter program follows intense lobbying in its favor by members of Congress, many of whom have bristled at the broader $495.6 billion Pentagon budget unveiled Tuesday, triggering a period of horse-trading over a number of individual weapons purchases and planned cuts in the armed forces.

U.S. Air Force officials had previously said that while the helicopter was needed, it may not make the cut because of budget pressures and the higher priority afforded to the F-35 fighter, replacement aerial refueling tankers and a new long-range strike bomber.

Officials cautioned that the long-term fate of the helicopter remained undecided. "Will it continue as a program of record? I don't know," said a defense official.

The U.S. Air Force wants to buy 112 new helicopters to rescue military personnel, replacing the aging fleet of Pave Hawks made by United Technologies' Sikorsky Aircraft unit, which emerged in late 2012 as the sole bidder for the contract, in partnership with Lockheed Martin Corp.

Boeing Co, which won a 2006 contract to produce a rescue helicopter, opted not to bid again after that deal was canceled for budget reasons in 2009. Other helicopter makers, including AgustaWestland and Airbus Group NV, also opted not to bid.

The Air Force also revealed that it wanted to spend $600 million over the next five years on a new training aircraft, a project that--like the rescue helicopter--looked likely to be excluded from the latest budget. A contract would be awarded in 2017 to replace the aging T-38 trainers, if funding is approved by Congress.

The trainer program, known as T-X, is expected to trigger a fierce battle between multiple industry teams for an aircraft that would be deployed by 2023 or 2024.

Boeing recently teamed up with Saab AB to offer a new jet, while BAE Systems PLC was allied with Northrop Grumman Corp. and Rolls-Royce PLC, and Lockheed with Korean Aerospace Industries.

Julian Barnes contributed to this article.

Write to Doug Cameron at doug.cameron@wsj.com

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