The United States has been building vaccine stocks ever since the discovery of anthrax spores in its mail system in 2001 sparked fears of a major bioterrorist assault.

"The U.S. government plans to procure a stockpile of MVA as part of its defense against the threat of smallpox virus being used as a bioterrorist weapon," Britain's Acambis said of its weakened MVA vaccine.

The weakened version is designed for the elderly and patients with immune disorders and skin conditions such as eczema.

Acambis said the U.S. tender was for 20 million doses of the weakened MVA vaccine in the first two years, with the option of a further 60 million doses later on. Analysts said the full 80 million doses could be worth over $1.2 billion.

The United States has already stockpiled more than 180 million doses of full-strength vaccine against smallpox, seen as the deadliest biological agent that terrorists could unleash.

The highly contagious virus killed untold millions until officially eradicated in 1979. Small stocks of the virus have been kept in laboratories, and the United States fears that some have been sold onto the black market.

Thirty percent of victims die and the rest are scarred for life by skin ulcers and pustules.

Acambis, once a biotech minnow, has been battling with Danish rival Bavarian Nordic for the United States' lucrative vaccine orders. Bavarian also confirmed the tender.

Analysts said the long-anticipated MVA order, to be awarded in February 2006, would probably be split between the two companies. But some thought Acambis, which manufactures its vaccine in Massachusetts, might have the edge for reasons of supply security.

"We expect the initial doses to be priced at $10 per dose and believe that the award could well be evenly split," said analyst Martin Wales at UBS Investment Research.

Acambis is co-developing the MVA vaccine with U.S. firm Baxter Healthcare.