The EDL has staged protests and skirmished with police since soldier Lee Rigby was hacked to death in a London street last Wednesday by two men who said the killing was in retaliation for the deaths of Muslims at the hands of British forces abroad.

Police shot and wounded the attackers, both Britons of Nigerian descent, at the scene of the crime. One, Michael Adebolajo, is still in hospital under armed guard while the other, Michael Adebowale, was discharged from hospital on Tuesday and will be questioned by police on Wednesday.

Rigby's killing galvanized the small but vocal EDL, which organized a march through central London on Monday during which about 1,000 people chanted slogans such as "Muslim killers off our streets".

Four EDL supporters who were arrested during that march have been charged with various offences.

In response to these events, Anonymous UK posted late on Tuesday what it described as a "mass data leak" including names, mobile telephone numbers and addresses of EDL members and donors, as well as what purported to be details about past convictions of some of the people listed.

The name Anonymous UK suggested that the person or people behind the post were part of the loosely organized international "hacktivist" collective Anonymous, which has taken credit for attacks on a variety of targets including the CIA.

Anonymous UK had earlier on Tuesday posted a video message on YouTube threatening the EDL with the "systematic and comprehensive dessication of your cult".

The message, posted under the user name "IWill Object", condemned Rigby's killing and accused the EDL of exploiting the murder to spread hatred.

"You ... have used this as another excuse to further spread your campaign of hate, bigotry and misinformation," it said. "Under the guise of national pride you have instigated crimes against the innocent and incited the subjugation of Muslims".

The EDL could not immediately be reached for comment.

Rigby's killing, as well as the EDL's response to it, have been widely condemned across the political and religious spectrum in Britain and there have been countless calls for unity and solidarity among all Britons.

Adebolajo's family condemned the attack as senseless on Tuesday and said they felt ashamed and horrified.

(Reporting by Estelle Shirbon; Editing by Louise Ireland)

The talks between Obama and Chinese President Xi Jinping will be followed by a July meeting between U.S. and Chinese officials focusing on cyberespionage, along with other strategic and economic issues. Secretary of State John Kerry announced the U.S.-China meetings when he visited Beijing in April.

The summit Friday and Saturday at a California estate also is aimed at establishing personal ties between Obama and Xi as relations between the two global powers grow increasingly complex.

Obama needs Xi's help in stemming nuclear threats from North Korea and Iran, combating the violence in Syria, and continuing the U.S. economic recovery.

The meeting at the 200-acre Sunnylands estate once owned by late publishing tycoon Walter Annenberg is their first since Xi took power in March. The talks also are coming months before the leaders originally had planned to meet, underscoring growing concern in both countries about potential fractures in the relationship.

Cybersecurity is likely to be the prickliest issue, given new reports on the extent and regularity of China's cyberhacking and increasing interest in Congress about how the U.S. can punish Beijing for its actions.

The Chinese government denies it engages in such spying against the U.S. But analysts say Beijing has started to indicate some willingness to address the problem during private talks with Kerry, national security adviser Tom Donilon and others.

The Chinese have been "much more positive in private meetings," James Lewis, a cybersecurity expert and former State Department official. The goal during Obama's meeting, Lewis said, will be to "test whether the Chinese have really moved to a better position where they want to engage."

A senior Obama administration official said that in recent talks, the Chinese seem to be less dismissive of U.S. concerns about cyberattacks, but that the matter would be not settled in one meeting.

Despite subtle signs of progress in private talks, security analysts say there is little evidence that Chinese-based hacking has eased.

"If the Chinese government wanted to signal to the United States that it wanted to curb its activity, the U.S. government would see it and we would see it," said Richard Bejtlich, chief security officer at the U.S.-based firm Mandiant. "But it's the same as it's always been."

Defense Secretary Chuck Hagel said Saturday at a security conference in Singapore that the U.S. has expressed its concerns about "the growing threat of cyberintrusions, some of which appear to be tied to the Chinese government and military."

Obama and Xi were not expected to meet until September, on the sidelines of an international economic summit in St. Petersburg, Russia. But the U.S saw signs that Xi was able to organize his government more quickly than previous Chinese leaders, according to the administration official, and that led the U.S. to conclude that it was best for Obama to meet Xi as early as possible.

The official insisted on anonymity in order to discuss internal administration discussions.

The White House hopes the relaxed setting at Sunnylands will lend itself to a more direct and free-flowing discussion.

"The meeting represents a huge investment by both sides in the relationship and the health of the relationship," said Nina Hachigian, a China expert at the Center for American Progress. "This is viewed as extremely special by the Chinese side."

The logistics of Xi's visit have been negotiated intensely, as is the case with all meetings between the U.S. and China. The Chinese government often pushes for limited media access, though the White House said Friday that U.S. officials were working to arrange an opportunity for reporters to ask questions of the two leaders at the end of the summit.

President George W. Bush held a somewhat similar meeting in 2002 when he hosted then-Chinese President Jiang Zemin at Bush's ranch in Crawford, Texas.

There's little expectation the summit will result in any concrete policy decisions. But Kurt Campbell, who until recently served as assistant secretary of state for East Asian and Pacific Affairs, said the discussions on both cybersecurity and North Korea have a "real potential for progress, not because of some enormous good will, but because China is badly positioned on both."

In a shift from his predecessor, Xi has taken a stern tone with North Korea. He has told the North to return to nuclear talks with the U.S. and other world powers, and has warned its young leader that no country "should be allowed to throw a region and even the whole world into chaos for selfish gain."

The U.S. long has pushed China to take more aggressive action against North Korea and welcomed Xi's comments. China is the North's strongest ally and biggest trading partner.

Financial issues also are expected to be a prominent topic in the talks between the leaders of the world's largest economies. Xi probably will press China's claims of business discrimination in the U.S. market.

Xi is likely to express deep discomfort over Washington's shifting of military assets to Asia and renewed emphasis on alliances with other countries within the region. China sees the strategy, referred to by Obama as his Asia "pivot," as an effort to contain Beijing's rising power.

At the Singapore conference, a Chinese military leader questioned the expanded U.S. role in the Pacific after Hagel said he hoped for better military ties between the two countries.

Xi and Obama first met last year when Xi, then vice president, visited the White House. Xi has a warm relationship with Vice President Joe Biden after their travels together throughout China during Biden's 2011 visit.

Xi has deeper ties to the U.S. than his predecessors. He's visited the country frequently, and stays in contact with families he stayed with in Muscatine, Iowa, while a visiting provincial official in 1985. His daughter attended Harvard.

___

Follow Julie Pace at http://twitter.com/jpaceDC

LONDON, June 3 (Reuters) - Jose Mourinho has returned to Chelsea as a "more mature" manager, at the "best moment" of his career and ready to begin building another Stamford Bridge empire.

"Now we are back together at a great moment for both. We are to ready to marry again and to be happy and successful again," the Portuguese told Chelsea TV on Monday after the Premier League side announced their 'Special One' had signed a four-year contract.

"I feel myself not just a Chelsea manager, it's the first time in my career that I arrive at a club that I already love.

"I am happy and proud because when you return to a place it's for some reason, it's not because you had good results in the past, not just because the fans like you, it's because you left something here. I left something here," he said.

Mourinho, who left Real Madrid last weekend after three years in Spain, returns to a club where he won the 2005 and 2006 Premier League titles, as well an FA Cup and two League Cups between 2004 and 2007.

After falling out with Chelsea's billionaire owner Roman Abramovich, Mourinho moved on to Inter Milan, where he won a second Champions League after a first with Porto, and then to Real.

"Knowing these different football cultures, being in different countries, was important for my evolution as a manager and as a coach," he said.

Now he is back.

"I think I arrive in my club, my Chelsea, in the best moment of my career, my stability as a manager, my stability as a person," Mourinho said.

"I arrive in the best moment ready to give everything I have to try and make the club happy.

"I'm the same nature but much more mature with a different approach to things. Much more ready to establish myself in the club and stay for a long time."

Mourinho, who first joined Chelsea in 2004 and ended their 50-year wait for a top-flight title, said he would not live off past successes at the club.

"They (the fans) know I'm not coming here to sleep on the past and to be comfortable just because we have a great feeling and a great relationship," he said.

GROUND ZERO

"I'm very demanding with myself. I want to start from ground zero. I want to work hard again, to build a different team from the one I did in the past. I want to have that pressure on myself, like it was the first time I was here... make people feel they have a reason to be happy with me."

Rather than spend millions of pounds on big-money transfers, Mourinho said his priority was to "improve the team through work" before considering any potential signings.

"If I don't do that I'm not happy with myself. If after that we can improve the team by buying a couple of players it would of course be fantastic."

Mourinho should not have any trouble settling into the old routine, especially with "three, four, five players from the beginning of the winning Chelsea" still at the club from his first spell.

The Portuguese was referring to stalwarts like John Terry, Frank Lampard, Petr Cech and Ashley Cole, but added that he liked "the profile" of a squad who last season finished third in the Premier League and won the Europa League under interim manager Rafael Benitez.

"It's a young squad with a lot of young talent and I think they need stability to reach a higher point of their evolution. I hope I can give them that," the 50-year-old said.

"It will be good for me to work with them and good for them to work with me. Together we can all improve and make a better team."

The Premier League, Mourinho said, was still a "fantastic competition", despite no English team reaching the Champions League quarter-finals last season for the first time in 17 years, and was more competitive now than when he left six years ago.

"People say the level of the Premiership has gone down compared with other countries coming up but I don't believe that so much," he said.

"I believe we will have five or six teams that are very very strong. In my time here from 2004 it was more about us, Manchester United and Arsenal and after that there was a gap to the other teams.

"At this moment you can put a group of five or six teams aspiring to reach a Champions League spot and with more ambition to win the Premier League." (Editing by Ed Osmond)

The Jascon-4 capsized early on Sunday at a mooring point around 30 km (20 miles) off oil-producing Delta state. Of 12 people who had been on board, one was rescued alive and another is still missing.

"The search and rescue operation that has been under way since 26 May has had to be stopped for safety reasons," the ship's owner West African Ventures said in a statement.

"The vessel, which is located some 30 metres under water in an upside-down position, has become so unstable that the risk of injury to our rescue divers has become unacceptably high," said West African Ventures, which is owned by Sea Trucks Group.

Chevron operates offshore and onshore joint ventures with the Nigerian National Petroleum Corp and says it spends around $3 billion a year on its Nigerian operations.

The U.S. energy firm's 2012 net daily production from Nigeria was 238,000 barrels of crude oil, 165 million cubic feet of natural gas and 4,000 barrels of liquefied petroleum gas.

In an age where bigger is seen as better when it comes to smartphones, and 5- or 6-inch screens are becoming more common, Mozilla -- the nonprofit organization which leads development of the-- made it a goal to help smartphone manufacturers producewith itsMost of these gadgets are about the size of the original iPhone, with low-end hardware specs and price tags to match.

There still aren't any Firefox OS phones being sold new in the United States, through wireless carrier partnerships. However, app developers and technology enthusiasts can now purchase an entry-level Firefox phone from Geeksphone in Spain,

"A developer device with a developer build"

According to Mozilla's Director of Websites and Developer Engagement, Stormy Peters, "The software here [in the Keon] is not necessarily 100% representative of what will ship into customer's [sic] hands." Those customers being the people who will eventually buy Firefox phones new from wireless carriers, when they launch in different markets worldwide later this year.

Anyone can buy a Keon, app developer or not; there isn't a check to see if you know Javascript. If you aren't planning to work on Firefox apps or the OS itself, though ...

"We would urge them to wait"

The "full [Firefox] experience" isn't ready yet on the Keon, according to Peters, although it is expected to receive updates "every couple of weeks" to add new features and performance improvements. The latter may be sorely needed; CNet editor Rich Trenholm said that the Alcatel One Touch Fire, a Firefox OS handsetto the Keon,even for "basic functions."

What exactly is under the Keon's hood?

The One Touch Fire has a 1 GHz processor and an HVGA (320x480) screen, the same as the Keon's. It has only 256 MB of RAM compared to the Keon's 512, though, which would slow it down as it opened new apps and web browser tabs.

The Keon also has 4 GB of internal storage, and a microSD slot to add a memory card.

Are there any more powerful Firefox phones for sale?

Geeksphone is also offering the Peak, a 4.3 inch smartphone with a 1.2 GHz dual-core processor (but the same 512 MB of RAM and 4 GB of storage). It is much more powerful than the cheap Firefox OS devices which will be sold at retail later this year, and is designed "for developers wanting to experiment with apps for devices that might be commercially available in the future."

The Peak costs $194 plus shipping.

Jared Spurbeck is an open-source software enthusiast, who uses an Android phone and an Ubuntu laptop PC. He has been writing about technology and electronics since 2008.

Meyer has, in the past, received plenty of criticism for his perceived favouritism towards certain players in his first year in charge of the Boks.

"I want to prove to the players that I am loyal to performance. I don't have favourites," said Meyer after naming his squad in Cape Town on Saturday.

"The great thing is there are nine uncapped players, six guys that are in the squad for the first time.

"It just shows to the players that if you really play hard in Super Rugby there is always a chance of playing for your country."

The Bok mentor has been criticised for a style of play which has been considered by some to be too defence oriented.

Among the newcomers are Cheetahs sensation Willie le Roux and Bulls prodigy Jan Serfontein.

Le Roux has been one of the standout players in this year's Super Rugby competition, and has emerged to be a valuable game-breaker.

Serfontein has made a meteoric rise since starring in last year's Junior World Championship-winning SA under-20 squad.

Meyer believed the inclusion of players such as Le Roux and Serfontein could give the Bok backline an added edge.

"[Le Roux] played some great rugby in Super Rugby and I believe he can play at full-back as well, he plays at the Cheetahs as a second fly-half which I like from a full-back coming from the back," said Meyer.

"He's really played well this year and it just shows you that a smaller union can deliver Springboks, now it is up to him to make the step-up."

Meyer said that while he had selected a number of players on their form this season, he would nevertheless stick with the core of players who did duty for him throughout last year.

Some newcomers in Springbok jerseys could be expected for the first Test in the incoming series against Italy at Kings Park in Durban on Saturday.

"You will probably go with the experienced side to start off, but I want to have a look at one or two of the youngsters coming off the bench," he said.

"It is a very young squad and you want to give the guys Test matches to get them up to 30 to 40 Test matches at the World Cup.

"A lot of these youngsters will be great players in future and I want to give one or two of them chances from the bench to see how they perform on a high level."

The Springbok coach said he would reward players who plied their trade in South Africa, with scrum-half Ruan Pienaar and flanker Francois Louw being the only overseas-based players included in the squad.

Meyer identified the scrums, breakdowns and goal-kicking as major areas he wanted the Boks to improve on from last year.

It is in the goal-kicking department that the national side particularly fell short last season.

Meyer believed that, had his kickers performed better in 2012, his winning percentage would have looked much rosier.

Bulls fly-half Morne Steyn was uncharacteristically below-par with his kicking last year, but he has been on song this season.

Incumbent Springbok fly-half Pat Lambie's aim has also been solid in this year's Super Rugby and Meyer expected more points to come the Sharks' way from goal-kicking.

SMITHFIELD, Virginia (Reuters) - Painted pig statues grace the picturesque brick sidewalks of this small Virginia river town of 8,000, and its slogan, "Hams, History and Hospitality," probably tells visitors all they need to know about Smithfield and its relationship with Smithfield Foods, the world's largest hog producer.

Earlier this week, Smithfield Foodsreceived a $4.7 billion buyout offer from a Chinese food company. News that an agreement had been reached and was awaiting U.S. government approval sent a shiver through the community, where it is the largest employer with a payroll of nearly 4,000 people. Worldwide, Smithfield employs 46,000.

Ham is the town's primary industry, followed by tourism.

The hope, community leaders say, is that Smithfield Food's new owners will invest in the community, not cut jobs.

Shuanghui International Holdings Ltd's agreement to buy Smithfield would be the largest acquisition of a U.S. company by a Chinese one. The bid is part of an effort to feed growing demand in China for U.S. pork.

"The best news here is that the operation stays, and at least for now the company has committed to keep the management here," said John Edwards, editor of the weekly newspaper, the Smithfield Times, as he started his day recently over coffee at the Main Street Restaurant.

"All you can do is keep your fingers crossed, hang tight and be positive about the whole thing," Edwards added.

Smithfield Foods, which processed 27.7 million hogs in 2012, built its headquarters on a sprawling campus of colonial-style buildings on the Pagan River in the center of Smithfield. It is the cultural and economic heart of the town, which was founded in 1752. On the outskirts is a plant where hams are produced.

The "Smithfield Ham" label is so revered that in 1926 the Virginia legislature enacted a statute that required any ham labeled "Smithfield" to be processed within town limits, similar to European laws governing the labeling of wines and cheeses.

Joe Luter III, Smithfield Food's chairman, is the third generation of his family to lead the company. The Luters started what would become the company in 1936 as a small packing house in Smithfield.

But production in the town began as early as the 1780s with Captain Mallory Todd, a merchant from Bermuda who began shipping hams to England. Smithfield's access to the sea, along with its climate and soil ideal for growing peanuts and corn, made it an excellent location to raise pigs and commercially export them.

SHARED WEALTH

Luter grew up in Smithfield and has shared his wealth with his hometown, creating a park and providing seed money for civic improvement projects such as brick sidewalks and historic-looking street lamps.

The Virginia Landmarks Register says Smithfield "is perhaps the best preserved of Virginia's Colonial seaports."

Randy Forbes, the Republican who represents Smithfield's Congressional district in Virginia, was measured in his response. Forbes said the potential takeover "warrants robust analysis and review to ensure the safety and security of America's citizens as well as the preservation of national economic interests, food safety, and environmental standards. I look forward to following that review process closely."

Constance Rhodes, president of the Isle of Wight-Smithfield-Windsor Chamber of Commerce, said that what she likes about the pending sale is that it keeps manufacturing not only in Smithfield but in the United States.

In what now seems like prescience, Rhodes visited China last year as part of a national Chamber of Commerce initiative. She learned enough Mandarin to say, "Hello, goodbye and write my name."

Local tourism officials expect more Chinese visitors, and they want the community to put its best foot forward to make them feel welcome as they explore a small American town.

But not everyone shares those views.

Lee Diggs, a software writer who has lived in Smithfield for eight years with her husband and children, said if wealthy Chinese start buying up property, it could fundamentally change the small-town atmosphere, accentuated by graceful riverfront homes and mom-and-pop stores along Main Street.

She said she would do everything she could to discourage prospective buyers.

"I'd probably tell them it smells real bad when the wind is blowing in the right direction from the packing plants. I'd paint a negative picture, so I could keep it for myself," she said.

(Editing by Barbara Goldberg and Eric Walsh)

SEOUL (Reuters) - Overtaking Apple Inc as the world's leading maker of smartphones has stretched Samsung Electronics Co's in-house supply lines, and the South Korean firm is now courting some of its rival's main parts suppliers.

After costly courtroom battles over technology patents, the two gadget giants are now going head-to-head over securing the best supply of parts as they jostle to rule the $253 billion smartphone market. The two took 100 percent of the industry's profit in January-March, Canaccord Genuity data show.

Trampling on Apple's supply patch could make life tough for the U.S. firm as it prepares for its next product line-up including a cheaper iPhone for emerging markets such as China. Having Samsung muscle in on its suppliers could drive up costs and lead to component bottlenecks, disrupting product launches.

Samsung's huge in-house supply chain - providing parts from displays and powerful processors to memory chips and batteries - has been a core strength in its war for smartphone supremacy. As it now looks to widen its lead with products spanning both the high and cheap-and-cheerful ends of the market, Samsung's supplies have become stretched, prompting it to hunt elsewhere to ensure it isn't caught short.

"The next round of the post-patent battle for them will be over component supplies," said Lee Sun-tae, an analyst at NH Investment & Securities. "Who wins access to the best performing components in class in large quantity - that's the key ... and explains why Samsung is shopping for components more than ever."

SHARP AND SOUR?

Samsung has made overtures to traditional Apple partners such as Japanese display maker Sharp Corp and South Korean chipmaker SK Hynix. Samsung, which buys most of its mobile screens from its Samsung Display unit, last year placed orders with Sharp for high-resolution LCD screens for its popular Galaxy range of products, though it later canceled the order, said two people familiar with the matter, asking not to be named as the negotiations were confidential.

Sharp, in which Samsung bought a 3 percent stake earlier this year for $110 million, said this week it was seeking to boost sales to the Korean firm, potentially souring the Japanese company's ties with Cupertino, California-based Apple.

Samsung is also using more chips made by Qualcomm, another major Apple supplier, in its flagship Galaxy S, which went on sale late last month.

Some other suppliers who provide parts to both Apple and Samsung include Toshiba Corp in NAND memory chips, Sony Corp, in image sensors, and Corning Inc for its Gorilla Glass used in iPhones, iPads and Galaxy products, industry data show.

STMicroelectronics and Bosch, the only mass producers of pressure sensors used in navigation features, supply those parts for the Galaxy range, and could be tapped by Apple for future products, according to research firm iSuppli.

TINY OVERLAP, BIG IMPACT

For sure, Samsung still buys the majority of its components in-house, and the overlap with Apple on external suppliers is, so far, limited. BNP Paribas estimates that more than 80 percent of component profits generated by Galaxy S4 sales go to Samsung itself and its units.

But even a tiny overlap can be damaging as smartphones are constantly upgraded to more powerful computing and media devices - allowing users to take pictures, shoot video, play music, game online, watch TV and navigate - raising the need for more and smarter components.

"Any disruption in even small parts that you wouldn't think are really core, say headphones, can affect product launches," said Lee at NH Investment & Securities.

For example, Taiwan's HTC Corp, which has slipped out of the top-10 smartphone makers, reported a record-low quarterly profit last month after delaying the full launch of its flagship model due to a shortage of cameras.

"Having a single supplier carries a lot of risk. Bearing that in mind, Samsung may even consider using LCD along with OLED in its signature Galaxy S range to reduce its total reliance on Samsung Display," said Song Jong-ho, an analyst at KDB Daewoo Securities.

Samsung Display doesn't produce LCDs for smartphones so as it boosts sales at the lower end of market it needs to outsource LCDs. The Korean firm uses the more expensive OLED display only on its high-end models.

NOT SO DIFFERENT

Outsourcing more components could mean Samsung will lose some of its hardware differentiation - a big selling point for the Galaxy range - and be seen as just selling generic phones, say some analysts.

The Exynos 5 Octa processor, which Samsung touted as having 8 brains designed to maximize energy efficiency while multi-tasking, is not used in the S4 models sold in the United States. Instead, Qualcomm's Snapdragon chips will power the phone in that crucial market, with Exynos chips used in select markets such as South Korea and some European countries.

"Given that Qualcomm chips are also found in rival products, and the much-heralded launch of smartphones with flexible display appears to be delayed, I'm worried Samsung is losing its hardware differentiator," said BNP Paribas analyst Peter Yu.

Samsung says both Qualcomm and its own chips have passed its rigorous quality standards and both will provide satisfactory user experience. "We'll continue to resort to multi vendors to ensure smooth supply," Kim Hyunjoon, vice president of Samsung's mobile business, told analysts on a recent earnings call.

Samsung's Exynos processors accounted for around 30 percent of the S3, but that is likely to fall to around 10 percent in the S4, analysts said.

"Qualcomm's latest chips are getting good reviews from carriers, which I think forced Samsung to switch in favor of Qualcomm from Exynos in the S4," said KDB Daewoo's Song. "There's even a possibility Apple may drop its own processor and go for Qualcomm chips in some future devices."

FLEXI-TIME?

Losing some of its hardware appeal and taking longer than expected to come up with innovative products such as flexible or wearable devices are additional challenges for Samsung, which is getting only mixed reviews for its efforts to improve software capability to integrate better with hardware.

In a recent review of the S4, Walt Mossberg, a gadget expert for the Wall Street Journal, said Samsung's software was "often gimmicky, duplicative of standard Android apps, or, in some cases, only intermittently functional.

Despite the lukewarm reviews, consumers keep snapping up the S4, according to carriers. For the first time in at least three years, Samsung last year spent more on marketing than on research and development, seeking to pick up market share in the absence of new, competing models from Apple. And Samsung's operating profit is seen topping Apple's this quarter for the first time in years, J.P. Morgan analysts predict.

"There's not much left in terms of what you can do to really differentiate your product as everybody's thinking something similar - flexible or wearable," said NH Investment & Securities' Lee.

In late 2011, Samsung told analysts it planned to introduce flexible displays on handsets "some time in 2012, hopefully the earlier part than later", but a year later it said the technology was still "under development." It again demonstrated prototypes of flexible phones earlier this year, but executives now say they can't disclose the timing of flexible smartphones.

Rivals are also moving fast. LG Electronics Inc, the third-biggest smartphone maker in January-March on strong sales of its high-end Optimus G model, said last month it planned to introduce an unbreakable smartphone by the year-end.

(Additional reporting by Mari Saito and Reiji Murai in TOKYO; Graphic by Catherine Trevethan; Editing by Ian Geoghegan)

LONDON (Reuters) - The U.S. government has signed an antibiotics development deal worth up to $200 million with GlaxoSmithKline to tackle the dual threats of drug resistance and bioterrorism.

The collaboration, the first of its kind between Washington and a drug company, will allow funding to move around GSK's antibiotics portfolio rather than focusing on a single drug candidate.

The rise of antibiotic resistance is causing alarm among governments worldwide, leading to warnings from officials such as England's chief medical officer Sally Davies that the issue is a "ticking time bomb" threatening public health.

Thomas Frieden, director of the U.S. Centers for Disease Control and Prevention, recently called for an urgent fight-back against "nightmare bacteria".

At the same time, there is concern about the potential threat from terrorists who might use infectious agents such as anthrax and plague as bioweapons.

The collaboration between GSK and the Biomedical Advanced Research and Development Authority (BARDA), part of the U.S. Department of Health and Human Services, will study potential new drugs to treat conventional pathogens and those that could be developed into weapons.

Britain's biggest drugmaker said on Wednesday it would receive $40 million for an initial 18 months and up to a total of $200 million if the agreement is renewed over five years.

The problem of antibiotic resistance and the rise of so-called "superbugs" that cannot be treated with traditional medicines has been growing for years, but drug companies have been reluctant to invest in new medicines because of poor returns.

Patients tend to take antibiotics for only a short period, prices are traditionally low and any new antibiotics are likely to be reserved for serious infections - once again minimizing the sales opportunity.

COST SHARING

David Payne, head of GSK's antibacterial discovery unit, said public-private partnerships, like the one with BARDA, were a key part to solving the problem.

GSK is one of relatively few large pharmaceutical companies still pursuing research into new antibiotics - but its scientists still have to put forward a viable business case internally for their research.

The financial support from BARDA is therefore a big help and will mean that experimental compounds are developed faster than would otherwise have been the case.

"This is a significant step forward because it enables us to share the cost of developing antibacterials," Payne said in an interview.

The compounds covered by the BARDA deal are still in initial Phase I testing, which means it will be several years before they are approved for use - assuming they succeed in later clinical trials.

A joint oversight committee, including representatives of both BARDA and GSK, will monitor progress of the experimental medicines, make decisions on allocating funds and decide whether compounds should be added or removed from the program.

GSK, along with other drugmakers, already has separate contracts with BARDA for other specific drugs and vaccines.

The decision to adopt a "portfolio approach" this time, however, makes the arrangement much more flexible, since it means work can move swiftly to other molecules if a particular drug candidate fails in tests, as often happens.

"It reflects the reality of what goes on in drug discovery ... you want to be able to easily move money from one molecule to another," Payne said.

(Editing by Helen Massy-Beresford)