Kwasi Kwarteng intervened last October when he issued a so-called public interest intervention notice to assess whether the Parker-Hannifin deal could prove harmful to competition and UK security interests.

It was announced on Tuesday night that "legally binding undertakings" by the company, aimed at satisfying the government's concerns, would now go out to public consultation before a final decision on whether the takeover could proceed.

That is due to end on 13 July.

Parker-Hannifin said in May it had agreed to sell its aircraft wheel and brake division to industrial machinery maker Kaman Corp to help address UK competition concerns.

The government also said that Parker has pledged to honour its existing public sector defence contracts and agreed to protect sensitive government information in Meggitt.

In addition to its business that produces parts for commercial aviation manufacturers including Boeing and Airbus, Meggitt also supplies components, mostly brakes, to military customers including the Ministry of Defence.

Tom Williams, Parker-Hannifin chairman and chief executive, said: "We are pleased that following very constructive engagement with the UK government, the Secretary of State is minded to accept the national security and competition undertakings we have offered as part of our pending acquisition of Meggitt.

"The combination of Parker and Meggitt is an exciting opportunity for both companies and we look forward to welcoming Meggitt to the Parker team."

The takeover won EU approval in April after Parker-Hannifin pledged to sell a factory in the United States.