On 9 November 1939, a proposal for a remote-controlled aircraft carrying a payload of 1,000 kg (2,200 lb) over a distance of 500 km (310 mi) was forwarded to the
RLM (German Air Ministry). Argus worked in cooperation with Lorentz AG and
Arado Flugzeugwerke to develop the project as a private venture, and in April 1940, Gosslau presented an improved study of Project "
Fernfeuer" to the RLM, as Project P 35 "
Erfurt".
On 31 May,
Rudolf Bree of the RLM commented that he saw no chance that the projectile could be deployed in combat conditions, as the proposed remote-control system was seen as a design weakness. Heinrich Koppenberg, the director of Argus, met with
Ernst Udet on 6 January 1941 to try to convince him that the development should be continued, but Udet decided to cancel it.
Despite this, Gosslau was convinced that the basic idea was sound and proceeded to simplify the design. As an
aircraft engine manufacturer, Argus lacked the capability to produce a fuselage for the project and Koppenberg sought the assistance of
Robert Lusser, chief designer and technical director at
Heinkel. On 22 January 1942, Lusser took up a position with the Fieseler aircraft company. He met with Koppenberg on 27 February and was informed of Gosslau's project. Gosslau's design used two
pulsejet engines; Lusser improved the design to use a single engine.
A final proposal for the project was submitted to the Technical Office of the RLM on 5 June and the project was renamed Fi 103, as
Fieseler was to be the chief contractor. On 19 June,
Generalfeldmarschall Erhard Milch gave Fi 103 production high priority, and development was undertaken at the Luftwaffe's
Erprobungsstelle coastal test centre at
Karlshagen, part of the
Peenemünde-West facility.