Brazilian aircraft manufacturer Embraer (ERJ) is in talks with General Electric (GE), Rolls-Royce (RR.LN) and Pratt & Whitney over next generation engines for a possible clean sheet airliner, said a top company executive Wednesday.

"We are looking at a series of commercial options, including larger commercial jets and turboprops. No decision has been taken but we are deep in discussion," Mauro Kern, Embraer's vice president for the airline market told Dow Jones Newswires.

He said that among the options being discussed is a commercial jet that is slightly larger than the existing E-jet family, which would put it in direct competition with the Bombardier (BBD.B.T) CSeries.

"However, it is difficult to make a decision on this without knowing the plans of the major players. We need to know what Boeing Co. (BA) and Airbus are planning for this segment," said Kern.

Embraer's largest commercial jet is the E195, which holds up to 120 passengers. However, arch rival Bombardier has launched the CSeries, which will carry 110-130 passengers. These planes are due to enter service in 2013.

At the time it launched the E-195, Embraer dismissed the idea of building larger planes to avoid stepping on the toes of Boeing and Airbus.

But next generation engine technology offers greater efficiencies and opens up other possibilities, said Kern.

He said that Embraer, also known as Empresa Brasileira de Aeronautica SA, would make a decision on next generation planes in the next 18 to 24 months and any new plane would not be rolled out until the second half of the next decade.

Embraer is the world's fourth largest aircraft maker, having made its name producing regional commercial jets but it has recently branched out into the executive jet market with some success.

Kern said Embraer continues to suffer amid low options take up and delivery postponement requests from clients as the commercial aviation market remains in the doldrums. He added that he doesn't see the commercial jet market recovering until late 2010 at the earliest.

Moreover, he wouldn't discount further job cuts, if the crisis continues.

In March, Embraer laid off 20% of its workforce because of the bleak outlook for the aviation industry amid the global slowdown.

-By Alastair Stewart; Dow Jones Newswires; 5511 2847-4520; alastair.stewart@dowjones.com