TOKYO (AFP) -- Japan's Kawasaki Heavy Industries will work with British aerospace giant Rolls-Royce to develop a new engine for the new Airbus A350 passenger jet, a newspaper said Sunday.

The two companies will decide on a basic design of the new engine, Trent1700, by the end of 2007, the Nihon Keizai Shimbun said.

The new engine will be based on Trent1000, also developed by Kawasaki and Rolls-Royce, and will cost between 15 billion yen (128 million dollars) and 20 billion yen, the business daily said.

Kawasaki is expected to supply parts including an air-pressure system, the newspaper said, adding that the two also plan to jointly procure raw materials needed for the engine.

The A350 is scheduled to begin service in 2010, two years later than the launch of Boeing's 787 Dreamliner.

Airbus is owned 80 percent by the European Aeronautic Defense and Space Company and 20 percent by BAE Systems of Britain.