France offers Russia €785m to ditch warship deal

France has offered Russia its terms to scrap a contentious contract to supply two warships that was suspended due to the Ukraine crisis, but Moscow judged the sum as unacceptable, a report said Friday.

Russian defence sources told Kommersant newspaper that the French side is willing to pay 785 million euros ($890 million), and the documents are now "being studied" by the Russian government, defence ministry and other relevant parties which participated in the 2011 deal.

But the daily reported that Moscow was not happy with the French offer, with the defence ministry claiming that Russian firms have now incurred 1.16 billion euros of costs associated with the ships.

The fate of the two Mistral helicopter carriers has plagued French-Russia ties for over a year, following the decision by Paris to put the 1.2 billion euro deal on ice as the West slapped sanctions on Russia over its annexation of Crimea and alleged backing for separatist rebels in Ukraine.

Russian President Vladimir Putin last month played down the importance of the ships and claimed that Russia ordered them mostly to help the French shipyard.

The Kremlin strongman, however, made clear Moscow would still like its money back.

"We are not planning to demand any penalties or exorbitant fines but all expenses should be returned," he said.

While Kommersant reported France is proposing to return only the cash that was paid so far on the deal, Russia would like to have other expenses reimbursed, such as training costs of 400 sailors for the crews and building port infrastructure in Vladivostok, where the first of the two ships was to be based.

"The option of returning the sum in the French offer categorically does not work for us," a source told Kommersant.

- Rising costs -

The first ship was due for delivery in 2014, while the second, called Sevastopol, was to be delivered this year.

A senior MP in the Duma lower house Vladimir Komoyedov, a former commander of the Black Sea fleet who now heads the defence committee, further said France actually owes Russia nearly twice what it is offering.

"It is necessary to demand 1.5 billion euro compensation from France, not just for breaking the contract but for all the costs, for preparing the 400-strong crew, for all transportation, including the fact that we had to send a ship to collect the crew" from the Saint Nazaire shipyard, he told RIA-Novosti agency.

Asked about the figures, a spokesman for the French foreign ministry declined to give any details. "We don't have any additional information," the spokesman told AFP.

Kremlin spokesman Dmitry Peskov also refused to comment on the discrepancy of the French and Russian calculations Friday, reiterating Putin's comments that Russia is ready to receive either the ships or the money.

Foreign Minister Sergei Lavrov, asked about the deal Friday, indicated that the issue is no longer a diplomatic one.

"The issue has moved to the legal and commercial sphere," he said during a press conference in Belgrade, adding that political aspects have "long been clarified."