It's utter lunacy that they've done this given that we've already ditched the Harriers, and so we are rapidly losing our STOVL expertise and will now have to try and regenerate it in a few years time. It really shouldn't be a political decision, and it's probably the case that the proposal was made by the MoD and signed off by the government. It is worth bearing in mind that, as they're non-nuke, it would be very difficult to generate the quantities of steam required to drive a steam cat and there isn't a working electrical cat yet. I personally think they should have gone nuke in the first place, but that's an entirely different question..
I can't help but feel inter-Service rivalry played too much of a part in the SDSR. The Harriers should never have been ditched (see Libya), but most of all the MoD needs to learn (and has done for decades) that it needs to set a specification that will meet their needs, without penny pinching at the outset, agree a price, then stick to it. BAe Systems shareholders must rub their hands with glee every time a modification to a program is announced.