Britain's Financial Times reported earlier on Sunday that a brighter defence outlook and a better than expected performance this year for the U.S. electronics business Finmeccanica bought in 2008 for $5.2 billion (£3.35 billion) had led the Italian state-owned group to keep DRS.

At the start of July Finmeccanica CEO Mauro Moretti said DRS was doing very well and first-half results looked better than expected. The unit had won some important multi-year contracts and its price tag, if it ever got sold, was now higher, he said.

The value of the unit had been hit by declining U.S. defence spending in the years after the acquisition.

Separately on Sunday, Finmeccanica said in a statement it had signed a contract worth a few hundred million euros to supply Qatar's army with an air surveillance and defence system.

(Reporting by Stephen Jewkes, writing by Valentina Za, editing by Silvia Aloisi and David Evans)