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LONDON (Reuters) - British manufacturer De La Rue Plc (DLAR.L) said it will challenge a decision by Britain to award a contract to print the post-Brexit blue passports to a European company.

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A handout photograph shows the original 'blue' British passport, which was subsequently replaced by the burgundy EU British passport, supplied by the UK government in London, Britain, March 22, 2018. UK Government/Handout via Reuters

The new blue British passports have been hailed by Prime Minister Theresa May as “an expression of our independence and sovereignty”, but will be made by a Franco-Dutch firm after Britain leaves the European Union, De La Rue said.

Media reports said the firm was Gemalto (GTO.AS), although it has not confirmed or denied those reports. Gemalto produces British driver’s licenses.

De La Rue, which makes banknotes and passports, said it would seek a judicial review of the provisional decision to award the British passport contract to an overseas company after it was undercut.

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A handout photograph shows the original 'blue' British passport, which was subsequently replaced by the burgundy EU British passport, supplied by the UK government in London, Britain, March 22, 2018. UK Government/Handout via Reuters

“Based on our knowledge of the market, it’s our view that ours was the highest quality and technically most secure bid,” a De La Rue spokeswoman said in a statement, adding that though its tender represented a significant discount on the current price, it accepted that it wasn’t the cheapest.

The decision to produce the passport abroad made embarrassing headlines for May, who announced in December that Britain would switch back to the dark blue it had used for decades.

A Daily Mail newspaper petition to have the new passports made by a British company has more than 265,000 signatures.

Britain’s current burgundy passports were introduced in 1988, following EU recommendations. But the EU does not require the color scheme and Croatia, which joined the EU in 2013, retained its blue passport with no plans to change it.

Britain’s interior ministry defended its decision not to award De La Rue the contract, saying the preferred bidder was selected “following a rigorous, fair and open competition.”

Britain’s biggest trade union Unite hit out at the government’s choice and said the French government would never have made such a move.

De La Rue’s current contract, which ends in July 2019, is worth 400 million pounds ($561.96 million). The new contract will start in October 2019, after Britain leaves the EU in March.

Shares in De La Rue were little changed on Tuesday, having fallen 6 percent when it said it had lost the contract in March.

Reporting by Alistair Smout; editing by Guy Faulconbridge

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