By Andrea Shalal-Esa

WASHINGTON (Reuters) - The Pentagon said on Thursday it would halt work on a second pilot helmet being developed for the F-35 fighter jet by Britain's BAE Systems Plc <BAES. L>, and focus exclusively on the main helmet built by Rockwell Collins Inc <COL. N> and Israel's Elbit Systems Ltd <ESLT. TA>.

The Pentagon's F-35 program office said the move followed improvements to the Rockwell-Elbit helmet, including a better night vision camera, and would save about $45 million (28.1 million pounds) in funding that would have been needed to finish the BAE helmet.

Lockheed said the move amounted to a vote of confidence in the main helmet and efforts to resolve earlier problems.

"To date, more than 100 F-35 pilots have flown more than 6,000 flights and 10,000 hours with the helmet, and their feedback has been very positive," said Lorraine Martin, Lockheed executive vice president and F-35 general manager.

Lockheed Martin Corp <LMT. N> is building three variants of the new single-seat, single-engine fighter plane for the U. S. military and eight countries that helped fund its development.

The plane comes with a sophisticated helmet that fuses data from the plane's many cameras and other sensors in the visor, an advanced new system that allows pilots to literally see through the wings and floor of the aircraft.

The Pentagon's F-35 program office and Lockheed hired BAE Systems to start developing an alternate helmet in 2011 after technical challenges emerged on the Rockwell-Elbit helmet that is currently used in testing and training.

Lockheed spokeswoman Laura Siebert said the company had spent about $57 million on the second helmet to date, with total investment slated to reach $104 million. Ending the work on the program would save $47 million, she said.

F-35 program office spokesman Joe DellaVedova said Lockheed and BAE were negotiating the terms of halting work on the alternate helmet.

In a statement, the F-35 program office said the new "Gen 3" version of the helmet developed by the Rockwell-Elbit joint venture since then would cost 12 percent less than previously estimated. The new helmet would be introduced to the F-35 fleet in 2016 as part of the seventh batch of jets to be built under low-rate production, it said.

The U. S. Marine Corps will use the current "Gen 2" helmet when it begins using the new warplanes in combat in mid-2015.

In addition to a better night vision camera, the new version of the helmet also includes new liquid-crystal displays, automated alignment and software improvements.

Rockwell and Elbit developed the new version of the helmet to address concerns raised by Pentagon testers and pilots about the current helmet, including a green glow that made it difficult to fly at night, a lag in data being displayed on the visor, and some "jitter" during high-angle turns.

The F-35 program office said the "Helmet Mounted Display System" gave fighter pilots all the information they needed to complete their missions - through all weather, day or night.

No comment was immediately available from BAE Systems.

(Reporting by Andrea Shalal-Esa; Editing by Gerald E. McCormick, Richard Chang and Nick Zieminski)

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