After a tough fight to block funding for a multinational missile defense system on Capitol Hill, the U.S. will continue funding the Lockheed Martin-led program in fiscal 2013.

In April 8 letters to the German and Italian defense ministers, Defense Secretary Chuck Hagel said that the Pentagon would fulfill the U.S. commitment to develop the Medium Extended Air Defense System (Meads) through fiscal 2013. Congress approved $380 million for the program, but that amount is subject to a 10% reduction due to sequestration, Hagel says.

That doesn’t mean the war between Lockheed Martin and Raytheon, which makes the rival Patriot missile defense system, has ended. In fact, it may be just beginning as the U.S. and its international partners decide how to proceed with Meads technologies.

Foreseeing an international fight for the future of air defense, Raytheon’s supporters in the U.S. Capitol tried to strip funding for the system out of the recently passed fiscal 2013 appropriations bill. And they succeeded in passing a provision in the National Defense Authorization Act restricting the Pentagon from spending money on the program.

In addition to Hagel’s endorsement of continued funding for the program, restrictions in Congress are not likely to hold up, because the funding will be traded to a NATO-led organization that U.S. lawmakers have no authority over, according to an industry official.

And future funding may be coming as well. Even as a Bloomberg report suggests that the fiscal 2014 budget will not include funding for Meads, the official expects that funding to harvest technologies from the effort could be buried in a Patriot modernization program or another budget line. Ultimately, that could mean a slowing of production of Patriot or radar upgrades, he says.

Plus, the effort to continue Meads development may continue overseas.

“Funding will enable the U.S., Germany and Italy to demonstrate the advanced 360-degree capabilities of Meads in a tactical ballistic missile intercept test later this year,” says Meads International, the Lockheed-led industrial team supporting the program in an emailed statement, adding that the U.S. will be positioned to “harvest proven technologies” as part of the Army’s Integrated Air and Missile Defense Strategy.

Germany has not officially promised to continue development of Meads. But a recent story in the Frankfurter Allgemeine Sonntagszeitung indicates that the German defense ministry plans to spend more than $320 million from 2014 to 2017 to further develop the system and is negotiating cooperation with Italy, Poland, Turkey and France.

In the U.S., work has continued on Meads, operating during the first months of the year under a bridge contract as Congress worked to solidify a full-year spending bill. “We’ve always anticipated because of Germany’s statements that they were strongly interested in completing development,” says Marty Coyne, business development director for Meads International.

Next up for Meads is a U.S.-NATO exercise in June, followed by a development and test activities. The year will end with a second intercept test at White Sands Missile Range, Coyne says.