LONDON (REUTERS) - The US Defence Department hopes to fund a much more reliable kill vehicle, or warhead, for the homeland missile defence system run by Boeing Co , but final decisions will depend largely on cost, the Pentagon's top arms buyer said on Sunday.

"It's going at the end of the day to be a question of affordability," Defence Undersecretary Frank Kendall told reporters on the eve of the Farnborough airshow.

Kendall said decisions had not been finalized on whether to upgrade the existing kill vehicles, built by Raytheon Co , or start from scratch with a new design.

Raytheon, Lockheed Martin Corp and Boeing have all expressed interest in bidding for a new kill vehicle.

The US military on June 22 carried out its first successful test since 2008 of the new kill vehicle that is used on 10 of 30 ground-based interceptors that have already been deployed. Twenty other interceptors carry an earlier version, which failed in an intercept test one year ago.

Kendall said the successful test marked "a very positive step that will us to move forward." He also praised the technical expertise of Vice Admiral James Syring, who heads the Pentagon's Missile Defense Agency.

Kendall said he supported testing the initial common kill vehicle that is in place on 20 of 30 kill vehicles, as well as more regular testing of such systems in general to shore up confidence in the system.

"Right now we're moving in the direction of a much more reliable kill vehicle, but how far we're going to go in that direction, ... and the exact form that's going to take, isn't final yet," he said.

Kendall said a successful June 22 missile defense test was encouraging and would help shore up the programme.

Boeing, prime contractor for the program, said there was a lot of activity going on about how to move forward with a new kill vehicle, and the prime contract for managing the Ground-based Midcourse Defense (GMD) system, but it was not clear when a new deal could be signed.