The Home Office has defended the selection of a Franco-Dutch firm to make the new post-Brexit blue passport, saying the choice will save taxpayers about £120 million.
Ministers came under fire after reports emerged that the travel document would be manufactured in France.
In December the Government announced that the UK passport would change from the standard EU burgundy colour to a blue and gold design after leaving the bloc.
The blue cover was billed as a return to the "iconic" original appearance of the British passport, with the colour first used in 1921.
At the time the move was announced, Theresa May said the document was an "expression of our independence and sovereignty".
But on Thursday the PM faced calls to explain to British workers why the passport appears set to be made on the Continent.
The furore erupted after it emerged the frontrunner in the race to be awarded the contract is Gemalto, which has its headquarters in Amsterdam and is listed on the French and Dutch stock exchanges.
In a statement, the Home Office said: "The preferred bidder has been selected following a rigorous, fair and open competition and all bidders were notified of the outcome last night.
"The chosen company demonstrated that they will be best able to meet the needs of our passport service with a high quality and secure product at the best value for money for our customers and the taxpayer.
"It's been the case since 2009 that we do not require passports to be manufactured in the UK.
"A proportion of passports have been made overseas since then with up to 20% of blank passport books currently produced in Europe with no security or operational concerns."
According to the department, the preferred bid will save the taxpayer approximately £120 million during the lifetime of the eleven-and-a-half year contract.
Up to 70 jobs will be created at factories in Fareham, Hampshire, and Heywood, Greater Manchester, the Home Office said, adding that the quality of the passport was prioritised over cost when examining the bids at a split of 60/40.
While the blank books may be manufactured overseas, passport holders' personal details and pictures will be added in the UK.
Current provider De La Rue said it was considering appealing against the decision.
The firm's chief executive Martin Sutherland told BBC Radio 4's Today programme: "I think we have heard over the last few weeks and months ministers more than happy to come on the media and talk about the blue passports and the fact that the blue passport is an icon of British identity.
"Now this icon of British identity is going to be manufactured in France."
He said his company had been producing passports for the UK for the last 10 years "without a single hiccup".
Tory MP Sir Bill Cash, chairman of the Commons European Scrutiny Committee, attacked the decision, saying it was "symbolically completely wrong".
Liberal Democrat Brexit spokesman Tom Brake said: "The blue passport saga is turning into a farce."
But Cabinet minister Matt Hancock told a Westminster lunch: "There's rules that we have to obey in doing these procurements.
"There is an irony, which is these rules are European rules and we are going to be leaving the European Union and then we may be able to - if we choose to - set out our own procurement rules."
The redesign, which routinely happens every five years, will come as part of a £490 million contract which also includes printing and assembling passports.
Gemalto said it was aware of reports regarding the contract, adding: "As the process is still ongoing and the terms of engagement are confidential, we cannot make any further comment on it at this stage."