The Taranis project, named after the Celtic god of thunder, forms part of the UK's Strategic Unmanned Air Vehicle Experimental programme.
BAE Systems is working with Rolls-Royce, Smiths Aerospace,QinetiQ and MoD military staff and scientists to develop and fly Taranis.
The jet has a bat-wing design, and is about the same size as a BAE Systems Hawk. It will be armed with a cannon, bombs and missiles, allowing it to autonomously track and destroy other aircraft and targets.
"This is a machine able to think for itself," said Chris Allam, project director at BAE Systems.
"It is a new generation of unmanned air vehicles which will not need a pilot on the ground with a joystick. It will be assigned an area to operate in and will acquire and track targets autonomously."
In the movie Stealth, the US Navy develops a fighter jet piloted by an artificial intelligence computer. However, the jet goes rogue and nearly incites a war before being destroyed by human fighter pilots.
BAE Systems allayed fears of a similar scenario by explaining that human authorisation will always be required before Taranis can use any of its weaponry.
"Taranis will make use of at least 10 years of R&D into low observables, systems integration, control infrastructure and full autonomy," said Mark Kane, managing director of autonomous systems and future capability at BAE Systems.
"It follows the completion of risk reduction activities to ensure that the mix of technologies, materials and systems are robust enough for the next logical step."
Taranis is not expected completely to replace human operated planes, but will be useful in situations such as surveillance flights, or when operating in highly dangerous or contaminated environments.
Ground testing is expected to take place in early 2009, and the first flight trials are scheduled to take place in 2010. Taranis could be fully operational within 10 years.
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