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France's President Francois Hollande has announed the delivery of a Mistral helicopter carrier to Russia is now suspended until further notice.
Paris has cited the ongoing unrest in Ukraine's east as a reason.
"The President of the Republic considers that the situation in eastern Ukraine still does not permit the delivery of the first BPC (helicopter carrying and command vessel)," TV station France 24 quotes a statement from the French President's office.
Paris initially postponed the move, with the delivery of the Vladivostok first planned for early in November. However, until Tuesday the deal had not been formally suspended.
In 2011 a deal was sealed envisaging the supply of two Mistral-class amphibious assault ships to Russia, with a price tag of EUR 1.2 B.
There have been no comments as to whether the second ship, the Sevastopol, is also to suffer delays.
Sevastopol's delivery is currently scheduled for next year.
France has been increasingly under pressure in the past months, with a number of other EU member states trying to talk President Hollande into putting the deal on hold as a punitive measure against Russia.
The decision also comes against the background of EU sanctions imposed on Moscow this summer.
Earlier in November French Foreign Minister Laurent Fabius warned Russia had not "met" the conditions for the delivery.
Russia, for its part, is determined to observe the terms of its contract, with Deputy Defense Minister Yury Borisov saying, "we are going to wait patiently."
Borisov also warned France would be facing penalties if it failed to fulfill its obligations.
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