French Defence Minister Herve Morin said the programme must be completed, responding to a report that the Airbus head wants to pull out, and insisted that client countries share the unforeseen extra costs.

"We want this programme to be completed," Morin said in a televised interview on Wednesday. "We have put all possible technological efforts into this plane."

Morin had said earlier that talk of dropping the 20-billion-euro project was a bid by the European Aeronautic Defence and Space Company (EADS) to gain leverage in refinancing talks.

He pointed the finger at the German government, reportedly reluctant to share the mounting costs.

According to the Financial Times Deutschland on Tuesday, Airbus chief Thomas Enders told a group of Airbus directors he "no longer believed in pursuing the programme" and had begun to prepare for it to be terminated.

Morin said on Tuesday that this was "a way of putting pressure on the German government" to help pay for completion of the project.

Developing the innovative high-tech aircraft has proved much more costly and time-consuming than first planned when the project was agreed in 2003 by NATO members Germany, Spain, France, Britain, Turkey, Belgium and Luxembourg.

A total of 180 aircraft have been ordered for about 20 billion euros (29 billion dollars) but clients are being asked to plough in more to cover unexpected costs which Morin estimated at five billion euros.

A source close to the German defence ministry was quoted on Wednesday in the newspaper Handelsblatt as saying: "It is out of the question for us to pay more than the 650 million euros extra stipulated in the contract."

Germany's defence ministry, which has ordered 60 of the aircraft for six billion euros, said on Wednesday it aimed to reach an agreement with Airbus but declined to say whether it would to cough up more money.

"We are focusing on implementing... the deal agreed with the company so that the aircraft is made," ministry spokesman Steffen Moritz told reporters in Berlin.

"But, of course, there are constant considerations about what other options there are."

Turkey meanwhile said it remained committed to the A400M but insisted it did not wish to pour more money into the troubled project.

"We do not wish to see the A400M project cancelled and we do not think it is right to decrease the number of planes to be purchased," Defence Minister Vecdi Gonul said in an Anatolia news agency report.

He stressed that Ankara, which plans to buy 10 of the planes, could not go over the price ceiling approved by the Turkish parliament for the project.

"Turkey's position... is to have no decrease in the number planes in the project and no increase in the base price of a plane," Gonul's office said in a statement.

Morin criticised Airbus, the pride of the French aerospace industry, for its handling of the project.

He said it should have drawn up a specific military contract, in which "there are always clauses that allow the price to be re-evaluated because we know there are always cost increases with military programmes."

Aerospace analyst Howard Wheeldon of London stockbrokers BGC Partners said that despite the German reservations, he expected the countries concerned to reach an agreement.

"Termination at this interesting juncture would set the air forces of many nations back to the point of their not being able to meet their respective NATO commitments a few more years from now," he wrote on Tuesday.

"Having got this far it would be quite ridiculous for governments to walk away."

earlier related report
A400M: Airbus sets deadline, Berlin blocks
Paris (UPI) Jan 6, 2009 - Airbus is threatening to scrap the A400M freighter aircraft program unless Europe's partner governments by the end of this month agree to pump more cash into it, a call Germany seems to be resisting.

Seven years after its inception and several delays since, the A400M finally took off for its maiden in December 2009. While the ride went smoothly, the program may still be terminated.

Thomas Enders, the Airbus head, has warned that he had begun to prepare the delayed and over-budget program to be terminated, the Financial Times German newspaper reported Tuesday.

The company has reportedly sent to the seven European partner nations a deadline until the end of January to share a quarter of the costs the program has run over budget.

Airbus, owned by EADS, wants partner nations Germany, Britain, France, Spain, Turkey, Belgium and Luxembourg to pump an additional $7.6 billion into the project.

Britain and France are ready to spend the extra cash to salvage Europe's biggest military aviation project.

"We want this program to be completed," French Defense Minister Herve Morin said in a TV interview. "We have put all possible technological efforts into this plane."

Yet it seems that France is heading for a faceoff with Germany. The country's government has been highly critical of the budget explosion and is resisting calls for more financial aid.

Berlin last year agreed to pay an additional $930 million on top of the $8.6 billion it has already committed under the original contract.

"We will definitely not pay more," German business daily Handelsblatt quoted a German Defense Ministry official as saying.

Costs to finalize the program will rise by more than $16 billion to $45 billion, the Financial Times Germany said.

Abandoning the A400M would mean Airbus would have to pay back some $8 billion in funding to the governments. The company is already pumping some $100 million a month into the program because it has not agreed with the partner governments over its extension.

It's not that the countries don't need a new freighter plane: Britain is eager to modernize its current fleet of Hercules and Boeing C-17 carriers, worn by the mission in Afghanistan; and France and Germany want new transport planes to replace their four-decade-old C-160 Transall machines, which are slow and inflexible.

However, the A400M has had engine problems, and Germany has doubts that the plane can be delivered in a reasonable time period.

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