In September 1955, Saunders-Roe received instructions to proceed on the SR.177 from the British Ministry of Supply. The Ministry also gave instruction for the production of mock-ups, windtunnel tests, and the development of construction jigs for the manufacture of an initial batch of aircraft. From the onset, the SR.177 faced competition in the form of an enlarged derivative of the Avro 720, which had itself been devised as a competitor against the smaller SR.53. Avro promoted the 720 to the Royal Navy, hoping to win favour away from the SR.177, which was by this point had reached the detail design phase. The Ministry ultimately opted to cancel all work on the Avro 720, primarily as a cost-saving measure, as well as to concentrate development work on HTP-based rocket motors, such as those powering the SR.53 and SR.177.