TOKYO (AP) — Japanese machinery maker Mitsubishi Heavy is using a Pratt & Whitney engine for its planned small jet, both companies said Tuesday, in what will be the first ''made in Japan'' passenger aircraft in three decades.

Mitsubishi Heavy Industries Ltd. also had been in talks with General Electric Co.'s GE Aviation unit and Rolls-Royce PLC about the selection of the engine for the Mitsubishi Regional Jet, or MRJ, project.

The twin-engine jet, which seats about 70 to 90 and is set for delivery as early as 2012, is designed to consume about 20 percent less fuel than rival jets because they are made with lightweight carbon fiber composite, Mitsubishi Heavy says.

Mitsubishi Heavy President Kazuo Tsukuda said the company is hoping to get a 20 percent market share of about the 5,000 regional jets expected to be in demand, or about 1,000 in 20 or 30 years, which is life span of a jet model.

''We feel strongly that we will be able to create an aircraft that will have an impact,'' he told reporters.

This is Japan's first nationally funded project for domestically manufactured passenger aircraft since the YS-11 turboprop airplane, whose production ended in 1973.

The company estimates the project will cost roughly 150 billion yen (US$1.28 billion) and may include a government subsidy of 50 billion yen (US$426 million).

If developed, the jet likely would compete against mid-sized jet makers Bombardier Inc. of Canada and Brazil's Embraer SA, as well as companies in China and Russia developing jets.

Mitsubishi's plane, the first regional jet to adopt composite materials for its airframe on a significant scale, will be powered by Pratt & Whitney's next-generation Geared Turbofan engines, the manufacturer said.

U.S.-based Pratt & Whitney is a unit of United Technologies.

Mitsubishi also said it will begin offering the MRJ for sale to potential customer airlines worldwide, and will make the final decision on whether to go ahead with the project by spring next year.

The jet will cost between 3 billion yen (US$25.6 million) to 4 billion yen (US$34.1 million), and the first flight is set for 2011, according to Tokyo-based Mitsubishi.

To carry out the project, it is in talks with Boeing Co. about cooperation to promote the jet, it said. Mitsubishi is considering setting up a company to handle the jet's development, manufacture and marketing, it said.

Mitsubishi Heavy has a track record in the aerospace industry, supplying composite wing parts for Boeing's 787 Dreamliner.

Demand for smaller jets with 60-to-100 seats is expected to rise over the next 20 years in regional markets. Mitsubishi's main target markets are North America, Europe and Japan.