France will look to sell the two Mistral carriers as it already operates three of its own

Russian warship reimbursement costs France under �1.2bn

The cost to France of reimbursing Russia for cancelling two warship contracts will be less than €1.2bn (£842m), said France's defence minister.

A 2011 deal for two Mistral helicopter carrier warships - Moscow's first major Western arms purchase in the two decades since the fall of the Soviet Union - was suspended last year after France came under pressure from its Western allies over Russia's role in the Ukraine crisis.

Defence Minister Jean-Yves Le Drian said today that while the initial price for the two vessels had been €1.2bn, the fact that the contract had been suspended and the ships were not finished meant France will have to pay less.

"Talks between President Putin and President Francois Hollande have concluded yesterday. There is no further dispute on the matter," he said. "Russia will be reimbursed euro for euro for the financial commitments taken for these ships."

The ships are now fully owned by the French state, but as its navy already has three Mistral warships Le Drian said it would look for other buyers, with Canada and Singapore both mentioned as potential destinations. Egypt, which has just bought French fighter jets and naval frigates, is another possibility.

"I am convinced there will be other buyers. Already a number of countries have expressed an interest for these two ships," he said.

The vessels contain some Russian technology, but statements from Hollande's office and Russian President Vladimir Putin on Wednesday, suggest the payment made by France gives it full freedom to do whatever it wants with the two undelivered vessels.

The ships' builder DCNS, which is 35 per cent owned by defence group Thales and 64 per cent by the French state, said last month it was costing it at least €1m a month to hold on to the ships.

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