The NATO Alliance Ground Surveillance System (AGS) suffered a blow as Denmark reveals plans to withdraw from the program in a time of fiscal austerity.

NATO Secretary General Anders Fogh Rasmussen, a former Danish prime minister, said: “I strongly regret this decision. AGS is designed to make soldiers from all NATO countries safer and more effective when they are deployed on operations. Denmark’s withdrawal from the program sends the wrong signal to our forces and to other allies.”

Denmark would have contributed some $60 million to the project, according to Politicken, a daily Danish newspaper. Denmark’s Terma company was also involved in the program.

U.S. firm Northrop Grumman [NOC] ISS International is the prime AGS contractor, with EADS, Finmeccanica‘s Galileo Avionica and the General Dynamics [GD] Land Systems-Canada. Denmark’s Terma is also involved.

The AGS Core will be an integrated system consisting of an air segment and a ground segment, alliance documents said.

The air segment will be based on the Block 40 version of Northrop Grumman’s RQ-4B Global Hawk high-altitude, long-endurance unmanned aerial vehicle. The UAV will be equipped with the state-of-the-art multi-platform radar technology insertion program, which provides high fidelity ground moving target indication and high quality radar imagery, and also with an extensive suite of line-of-sight and beyond-line-of-sight long-range, wideband data links.

The combat-proven Global Hawk today is expected to have a U.S. Defense Department funding review, and the Euro-Hawk is preparing for flight tests before deploying to Germany for the German Ministry of Defense.

The NATO-owned and -operated AGS Core capability would allow the alliance to perform persistent surveillance over wide areas from high-altitude, long-endurance, unmanned air platforms operating at considerable stand-off distances and in any weather or light condition, alliance documents said. Using advanced radar sensors, the AGS Core will continuously detect and track moving objects throughout the observed areas, as well as provide radar imagery of areas and stationary objects.

The AGS ground segment will provide an interface between the AGS Core system and a wide range of Command, Control, Intelligence, Surveillance and Reconnaissance (C2ISR) systems to interconnect with and provide data to multiple deployed and non-deployed operational users, including reach-back facilities, remote from the surveillance area.

The primary ground segment component will consist of a number of ground stations in different configurations, such as mobile and transportable configurations, which will provide data link connectivity, data processing and exploitation capabilities, and interfaces for interoperability with C2ISR systems.

The AGS program began in 1995. In November 2007, due to declining European defense budgets, NATO chose to move forward with a UAV-only solution based on an off-the-shelf Global Hawk RQ-4B and the multi-platform radar technology insertion program (MP-RTIP).

With Denmark withdrawing, 14 nations still are participants in AGS, though published reports said some nations might take another look at the project. Those nations are: Bulgaria, Canada, the Czech Republic, Estonia, Germany, Italy, Latvia, Lithuania, Luxembourg, Norway, Romania, Slovakia, Slovenia, and the United States.