Boeing has decided to proceed with an expanded version of its strong-selling 787 Dreamliner jet, bowing to pressure from airlines, the company said on Monday.

The composite-built 787, due to start commercial flights in 2008, helped spark a recovery in Boeing's fortunes last year, as it overtook European rival Airbus in orders for wide-body aircraft.

Boeing had been reluctant to build a larger version of the plane, which would seat about 300 passengers in three classes, because of concern it would cannibalize sales from its older 777-200 ER jet.

But Mike Bair, general director of the 787 program, said Boeing decided to go ahead with the expanded version, which would begin flying in late 2012, because Dubai-based Emirates, long an advocate of the larger version, was joined by others.

"As time has marched on and we talked to other carriers it's become pretty obvious to us that the interest is more widespread than just Emirates and that's really what has caused us to look at this opportunity more seriously," he said.

Boeing is talking to "around a dozen" airlines about the plane, which would have the same 8,600 to 8,800 mile range of a previously planned 250-seat version, he said.

Emirates, which placed a USD$9.7 billion order for Boeing's 777 jet late last year, has said it is weighing an order of some 50 mid-sized widebody planes from either Boeing or Airbus.

The airline's president said in November that Airbus was closer to meeting its requirements because it had already launched a larger sized version of its A350 -- a plane being developed to compete with the 787.

Boeing's move toward the larger plane comes amid evidence that the jet market remains fiercely competitive despite the US planemaker's inroads against Airbus last year.

The Wall Street Journal reported on Monday that another Middle East-based carrier, Qatar Airways, has backed off from an earlier commitment to buy 20 Boeing 777s and is now considering the Airbus A340 instead.

Still, Bair said demand remains strong for the 787, for which Boeing has received 298 firm orders, meaning its planned production to the end of 2011 is "completely committed."

"We continue to be very gratified with the market response," he said. "If anything it's getting even more frenetic."

While financially troubled US airlines are mostly shying away from ordering planes, the picture is more optimistic in Europe, where "we're having conversations with a number of big carriers," Bair said.