A day after the United States had requested a WTO ruling on the legality of European aid for Airbus, EU sources said they were set to counter attack by contesting US help for Boeing.

Both sides had tried to avoid a full blown dispute at the WTO, but failed to meet an April 11 target for an amicable solution.

The WTO's 148 members can face huge penalties if they are found to have breached the rules of global commerce and then fail to fall into line with its decisions.

The WTO said it received Washington's complaint on Tuesday and that an initial hearing was scheduled for June 13 to set up a dispute settlement panel.

The panel could take until 2006 to rule on the dispute, and with possible appeals by either side, a final decision may come even later.

After a visit to the WTO's Geneva headquarters on Tuesday, EU Trade Commissioner Peter Mandelson said he was disappointed by the US move against Airbus, which has overtaken Boeing to lead the global civilian aircraft market.

Mandelson told reporters: "Airbus's success is well earned. It's won through hard work, high technology and huge creativity, not by subsidies as Boeing would like to pretend".

"This decision is highly regrettable from the standpoint of all those who believe that the WTO has better things to do with its time than referee this grudge fight of Boeing against Airbus."