LE BOURGET, France — Boeing said on Tuesday that it was prepared to go head to head with its European rival, EADS, to win a bitterly contested $35 billion contract from the Air Force by converting its 777 passenger plane — a bigger aircraft than Airbus is offering — into a refueling tanker.

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Ted S. Warren/Associated Press

A Boeing 777 assembly line in Everett, Wash. The company hopes to convert the passenger jet to an Air Force refueling tanker.

In what will be the third effort in a decade to replace the Air Force’s aging tanker fleet, the Department of Defense is expected to release soon a preliminary request for proposals, according to executives from both companies.

No military contract has stirred as much rancor between Boeing and Airbus as the refueling tanker. The contract, which was first let in the late 1990s, was awarded in February to a consortium of Northrup Grumman and the Airbus parent, European Aeronautic Defense and Space, only to be withdrawn in September after investigators called the selection process flawed.

Enormous financial and strategic issues ride on the project, and the size of the contract also has significant ramifications for suppliers like Honeywell, which worked with both of the prime contractors.

Meanwhile, the delays and chance of further protests have raised the prospect that the contract could be split between the two bidders — a solution that the defense secretary, Robert M. Gates, has opposed.

“If the Air Force values more fuel, more cargo, and more passengers, the 777 offers superior capability,” David Bowman, the Boeing executive in charge of the tanker program, said at the Paris Air Show on Tuesday. “We are ready to build America’s next tanker with whatever capability our customer requires.”

Airbus received the news that Boeing could respond with a bigger aircraft with characteristic bravado.

“We need to evaluate it, but certainly they have higher capacity with higher development costs,” the Airbus chief executive, Thomas O. Enders, said. “I think it just shows how seriously they take us this time around as a competitor.”

Mr. Bowman acknowledged that Boeing had not yet conducted critical wind tunnel testing on the refueling apparatus of a 777-based tanker. He said the craft would take about the same time to develop as a tanker version of Boeing’s smaller 767 jetliner, which the company submitted as its bid last time — though the 777 version would cost more simply because it would be bigger.

The 767-based tanker is now in service in Japan. Airbus’s A330-200 tanker, meanwhile — the model that won and lost the Air Force contract last year — has won four other competitions but is still undergoing flight tests for Australia.

Mr. Bowman acknowledged that submitting a yet-to-be-designed 777 could lose Boeing the advantage of time. “If the customer values schedule, then the Airbus tanker is what they want,” he said.

Patrick M. Shanahan, the Boeing vice president for airplane programs, said that the 777 would be fitted into Boeing’s existing assembly plants. “I don’t think it’s a matter of building a new building as much as utilizing the final assembly in a different way,” he said.

Airbus, however, plans to establish an assembly plant in Mobile, Ala., that would also produce freighters based on the same aircraft model. That would give Airbus a long-sought bridgehead in the United States that would help offset its euro-based costs — a disadvantage, since aircraft are priced in dollars.

“This is the only important tanker contract and it has to be awarded,” said Doug McVitie, the founder of Arran Aerospace in Dinan, France. “It is important to Boeing for reasons of prestige and strategy.”

Beyond the A320 freighter plane, Boeing may fear that Airbus could assemble the A320 passenger plane and eventually the A350-XWB in Alabama, Mr. McVitie added.

American certification authorities, meanwhile, will not be able to ignore the recent mid-Atlantic crash of the A330-200 Airbus operated by Air France last week.

The intensely political nature of the tanker contract, and the inevitable protests from the loser each time, has led to suggestions that the contract be split.

Mr. Bowman said that Boeing could live with that solution. “If the customer decides on a dual buy, we’re fine with that, but I’d rather compete and win,” Mr. Bowman said.

At Airbus, the response was similar. “We want to win the whole thing,” Mr. Enders said. “We won it last year, and we want to win it again.”

Bob Smith, chief innovation officer at Honeywell, said a split contract could have implications in determining which model plane each contractor ultimately presents. “If they do a split acquisition, I’m sure it will change the strategies,” Mr. Smith said.

Nick Cunningham, an aerospace analyst at Evolution Securities in London, said that a split contract could be seen as an admission that the procurement process was not working.

“It’s like kindergarten sports day: everyone has to have a prize so they don’t cry,” Mr. Cunningham said.

www.nytimes.com/2009/06/17/business/global/17boeing.html