Paris: France on Tuesday pushed back "until further notice" the delivery of a controversial warship to Russia because of the Ukraine crisis, sparking a measured initial response from Moscow.
President Francois Hollande said in a statement that the "current situation in eastern Ukraine still does not allow for the delivery of the first" of two Mistral-class vessels France has built for Russia.
"He therefore decided to delay until further notice" the decision on whether to grant the export licence needed to deliver the ship to Russia, the statement added.
Russia has reportedly warned Paris of "serious" consequences unless France delivers the first of the two Mistral-class helicopter carriers by the end of November.
But Moscow`s reaction was relatively calm after Hollande`s announcement, with Deputy Defence Minister Yury Borisov saying Russia did not immediately intend to file a claim against France for breach of contract.
"We`ll wait patiently... So far we are not filing a claim anywhere," Borisov told RIA Novosti news agency.
The first of the two assault ships -- which can carry 16 helicopters, four landing crafts, 13 tanks, 450 soldiers and a hospital -- was supposed to be delivered earlier this month, according to the original deal signed in 2011.
But amid the Ukraine conflict and the rapid decline in the West`s relations with Russia, France has come under intense pressure from its allies, particularly the United States, and in September postponed the delivery.
A source close to the case said Hollande`s announcement was tied to the deadline for the contract, without revealing further details.Paris faces a serious dilemma over the Mistrals.
It could be liable for hefty fines if it breaches the 1.2-billion-euro ($1.5-billion) contract.
But it would also risk the wrath of its allies around the world if it were to deliver the hot-button technology to Russia at a time when Moscow is in the diplomatic deep-freeze over the Ukraine unrest.
"Whatever our future decision, half of the world will have it in for us," a top-level French official who declined to be named said earlier this month.
Given an economy that is barely moving forward, France is unwilling to have two enormous white elephants on its hands and no cash to show for it.
Selling the ships to another client is not possible as Russian technology has already been installed on board, which Moscow would not want any other country to have and which in any case is not technically compatible with Western military systems.
Also weighing on the French decision is its reliability as an arms export partner as it seeks to sell Rafale jets to countries such as India.
A well-placed source in the Russian defence ministry told the Interfax agency: "We have no doubt that we`ll get these helicopter carriers. France has even more interest than we do in delivering them."
"We can do without them but what will France do with them? That`s the question," added this source, who said the contract allowed for a three-month delay that would push the final deadline back to mid-February.
However, Borisov told the ITAR-TASS news agency that if France ultimately refused to hand over the ship, Russia would "go to court and impose fines".
"Everything is written in the contract. We will act according to the wording of the contract, like all civilised people," Borisov said.
France had hoped that a ceasefire agreement signed in September would pave the way for a clear-conscience delivery of the Mistral but conditions on the ground in eastern Ukraine have since deteriorated, with the West pointing the finger at Russia.
Meanwhile, some 400 Russian sailors currently being trained in Saint-Nazaire in western France, where the shipyard is located, continue to kick their heels until their fate is decided.
Several dozen sailors could be seen on Tuesday afternoon training or jogging on the harbour nearby while the vast grey vessel Vladivostok remained anchored just offshore, its nose pointing out to sea but, for the moment, going nowhere.