French President Nicolas Sarkozy and German Chancellor Angela Merkel said they would make room for another six months of negotiations to agree on the future of the $28 billion project.

"We said we'd give ourselves a little delay of six months to continue to discuss the best solution," Sarkozy said after talks with Merkel this past week.

Before the start of the Paris Air Show on Monday, Louis Gallois, chairman of the European Aeronautic Defense and Space Co., welcomed the decision and said he expected the first A400M flight around the end of this year.

One of the most ambitious European military aircraft projects ever, the A400M is intended to replace the aging airlifting capacity of Europe's military powers. The turbo-prop carrier would be slightly larger than Lockheed Martin's C130J Hercules and able to transport troops and large equipment into combat zones. The project, however, has been delayed by problems with the software running the plane's engines.

Airbus, the plane maker owned by EADS, has already missed a March 31 deadline to get the A400M into the air. Launched in 2003, the project is three to four years behind schedule and nearly $7 billion over budget, the French Senate recently found.

Germany, France, Britain and Spain are the main supporters of the project, with 162 orders among them. Of the four, only Britain has in the past publicly threatened to leave the project. Financial problems have already caused London to try to pull out of another costly order, the Eurofighter jet plane.

EADS is eager to accommodate British concerns, as a pullout of any major partner could cause the entire project to fail. If that happens, EADS would have to pay back government subsidies worth some $8 billion. EADS invests $100 million per month in the project, to which 6,000 jobs are linked, the company has said.

All four nations are in desperate need of the A400M.

Britain needs to modernize its current fleet of Hercules and Boeing C-17 carriers, worn by the mission in Afghanistan.

France and Germany want new transport planes to replace their four-decade-old C-160 Transall machines, which are slow and inflexible.

The A400M would be faster than the Transall and able to carry double the weight for three times the distance -- crucial for the mission in Afghanistan, where Germany has 4,000 troops. "We really need the new plane," German daily Die Welt quoted Merkel as saying.

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