A House-Senate conference committee drafting the final language of a major defense bill voted late Thursday to scrap the 23 billion dollar program, which faced criticism as a sweetheart deal for the aerospace company.

The action appeared certain to doom the contract for Boeing.

A former US Air Force official who was involved in the tanker deal and later went to work for Boeing, Darlene Druyun, admitted violating federal conflict-of-interest rules and was sentenced recently to nine months in prison.

Lawmakers also dropped a last-minute effort to reopen the bidding process for the tankers.

Boeing, based in Chicago, has been hoping to provide the Pentagon with 100 specially modified 767 jetliners to replace the current tanker fleet.

The Pentagon put the program on hold after the conflict-of-interest charges arose.

Boeing said in a statement that it still hopes to work with the Air Force on new tankers, despite the apparent end of the current deal.

"The House and Senate Committees have done their work and have published their results," a Boeing spokesman said.

"The need for new aerial refueling tankers is clear and the path forward is clear. The direction includes the multi-year procurement authority for 100 tankers. We support the studies that have been requested by the Secretary of Defense and await the results. We look forward to working with the Air Force to provide a tanker solution."

But Standard and Poor's said in a note the outlook for Boeing is less favorable, even if it is able to secure a different agreement for tanker planes.

"The conference agreement preserves the option to purchase 100 tankers, which, if awarded, most likely would be on less attractive terms than the original contract," S and P analyst Roman Szuper said.

"That decision also increases doubts about the viability of the 767 jetliner program, given its declining backlog."

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