OTTAWA - Denmark has formally notified the federal government it will pull out of military flight training in Canada in three years, The Canadian Press has learned.

The move further clouds the future of the Bombardier-run NATO Flight Training in Canada (NFTC) program. It is the latest setback for the advanced flight-training school, which operates out of 15 Wing in Moose Jaw, Sask., and 4 Wing at Canadian Forces Base Cold Lake in Alberta.

An air force spokesman confirmed the decision by the Danes to end their contract in 2010, but denied it would spell the end of the $3.4-billion program.

"It has no impact on the NFTC program" other the fact fewer students will be enrolled, said Brian Watson, director of major procurement at the Defence Department. "We would have preferred them to stay."

He said the centre will continue to operate until the end of the 20-year contract with Bombardier because Canada will still need to train fresh pilots.

First conceived in 1994 when private-public partnerships were especially popular, the privately operated, publicly funded flying school has struggled to attract students. The centre has taught pilots to fly jets, multi-engined turbo-prop planes and helicopters since 1998.

Canada, Denmark, Hungary, Italy, Britain and the United Arab Emirates are among the countries that have sent students to the school, where they've been taught to fly BAE Systems' Hawk 155 jets and Raytheon's T-6A Harvards.

Aside from training pilots from NATO countries, the NTFC is expected to compete internationally with other schools in order to survive. Italy indicated early last year it does not intend to remain in the program beyond 2010.

There are signs other countries are shopping around, as well.

A one-year contract with the UAE ends this year and Britain's arms procurement minister, Lord Peter Drayson, announced Nov. 30 that British authorities had appointed the Ascent Consortium - made up of the VT Group and Lockheed Martin - to train Royal Navy and Royal Air Force pilots.

Lockheed Martin is principle contractor in the design and construction of the next generation of attack jet - the Joint Strike Fighter, or F-35 Lightning II.

In its partnership with the VT Group, the U.S. giant is using state-of-the-art ground trainers that defence industry insiders say outstrip anything at the NFTC.

Canada, a partner in the F-35 program, is contributing $660 million toward long-term research and development of the new stealth fighter and establishment of a yet-to-be defined "infrastructure system" for the new jet.

The air force's enthusiastic support of the new fighter and the industrial development strings attached to it may inadvertently undermine the NFTC.

Briefing notes prepared when Defence Minister Gordon O'Connor was sworn in last year say the Canadian flight school is pinning some of its long-term hopes on training students to fly the F-35.

Watson downplayed the competition, saying two countries have expressed interest and they are looking "very seriously at the NFTC." He wouldn't identify the countries.

"The NFTC program is still quite healthy," he said. "We have a lot of interest from foreign countries and we're marketing around the world."

In 2002, Auditor-General Sheila Fraser raised concerns when she discovered that Canada's Defence Department had paid $65 million for pilot training that was never delivered. The problem was corrected, but in an update to Parliament last spring, Fraser noted that the military is still not able to enroll enough pilots to fill its cockpits

Last fall, former Liberal cabinet minister and Saskatchewan MP Ralph Goodale expressed concern in the Commons that other countries are dropping out of the program. O'Connor brushed aside those worries, saying the centre has a "great future."