in persuading regulators to let the 787 fly.
People familiar with the matter say it is ready to implement a fix involving a tough fireproof casing for the battery, but there have been no public signs that regulators would accept this without a deeper understanding of what caused the fire.
Shares in Airbus parent EADS ended flat, while shares in French battery maker Saft fell over 1.4 percent.
Saft developed the lithium-ion battery for the A350 but is also expected to supply the fallback solution as Airbus's main supplier. A spokeswoman said Saft supported Airbus's decision.
Lithium-ion batteries have been in consumer products such as phones and laptops for years but are relatively new to industrial applications such as back-up batteries for electrical systems in jets or energy storage on wind farms.
Their main advantage is that they are lighter and more powerful but they are sensitive to mishandling and can ignite.
Last March, Airbus itself warned that the risks associated with lithium-ion required "the attention of the entire industry," according to a presentation reported by Reuters.
But in a second presentation coinciding with the opening of an A350 assembly plant in October 2012, Airbus said lithium-ion was a "less hazardous material compared to previous batteries".
Cutting out weight and allowing airlines to burn less fuel has been the single-minded goal of aircraft designers for decades, but rarely more so than with the carbon-fibre A350 and 787 as competition for orders reaches fever pitch.
Switching to heavier nickel-cadmium will mean adding 80 kilogrammes of weight to the A350, which would normally have engineers fretting, but concerns over delays took precedence.
Surprisingly, industry sources say the nickel battery may be the same size or even smaller than the lithium one, once the latter's unique electrical protections are stripped out. The actual nickel-cadmium cells are larger than lithium-ion ones.
Boeing's options are seen as more limited because its 787 needs more power to support a greater array of electrical systems - originally one of its futuristic selling points.
Its rival's decision leaves it as the only large commercial jetmaker relying on lithium-ion for main batteries. However, Boeing said it remained upbeat about its well-tested design.
"Boeing is confident in the safety and reliability of lithium-ion batteries," a spokesman said by email. "There's nothing we've learned in the investigations that would lead us to a different decision regarding lithium-ion batteries."