Russia has given up on its EUR 1.2 B deal with France for the procurement of two Mistral-class amphibious assault ships, a senior Russian government official has said.

"Russia won’t take them, it’s an accomplished fact," Russian newswires quoted Oleg Bochkaryov, deputy head of the Military Industrial Commission, as saying on Tuesday. The commission is the government body in charge of overseeing Russia’s defence industry.

The deal has soured relations between Paris and Moscow for more than a year, with France tying the delivery of the two warships to progress toward a political settlement of the crisis in Ukraine and the honouring of the ceasefire agreement by all sides in the conflict – two conditions that don’t appear to have been sufficiently met. The West accuses Moscow of providing military support to pro-Russian separatists in eastern Ukraine - a charge dismissed by Russia.

Under the 2011 contract France was due to deliver one Mistral-class helicopter carrier in the autumn of 2014 and the second one in the second half of 2015.

With Moscow having already paid for the ships “now there is only one discussion -- about the sum of money that should be returned to Russia," Bochkaryov said. He added that Russia planned to build similar warships itself.

Paris had already proposed that a EUR 785 M compensation be paid to Moscow on condition France would be allowed to sell the ships to another buyer, but Russia demands a payment of at least EUR 1.1 B, according to Russian media reports published earlier this month.

The Mistral story, however, appears to be far from over.

Russian Kommersant newspaper reported on Wednesday that Deputy Prime Minister Dmitry Rogozin had reprimanded Bochkaryov for his statement on Mistral. According to Kommersant, Bochkaryov was reprimanded because so far Russia hasn’t officially given up on buying the two warships and Bochkaryov had never taken part in the negotiations on their delivery.

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