Vladivostok warship, a Mistral class LHD amphibious vessel ordered by Russia, in western France. (AFP)
France said Wednesday "conditions" were not in place to deliver the first of two Mistral-class warships to Russia, a move planned later this year that has sparked controversy given the crisis in Ukraine.
Paris agreed in 2011 to build and sell the two advanced helicopter assault ships to Russia for a total of 1.2 billion euros ($1.6 billion) with the first scheduled for delivery in October or November and the second in 2015.
Until recently, French leaders had refused to back down on a sale crucial to a country suffering from stagnant growth and record-high unemployment, despite widespread condemnation due to Russia's involvement in the Ukraine crisis.
"The President of the Republic declared that, despite the prospect of a ceasefire which still remains to be confirmed and implemented, the conditions for France to deliver the first warship are not to date in place," Francois Hollande's office announced Wednesday in a statement, on the eve of a major NATO summit.
The announcement came just hours after Russian President Vladimir Putin raised hope of an end to the four-month war in the former Soviet republic, calling on pro-Kremlin rebels and government forces to cease fire and agree to the broad terms of a truce.
The situation in Ukraine is "serious... the actions taken recently by Russia in Eastern Ukraine go against the foundations of Europe's security," added the French statement, issued after a meeting of the country's defence council.
Hollande had acknowledged in a recent interview in Le Monde daily that "if there was additional tension and it was impossible to find a way out, we would have to think about it," referring to the Mistral delivery.
That interview was carried out before widespread accusations that Russia had sent troops into Eastern Ukraine.
The planned delivery of the warships had created outrage, with President Barack Obama expressing "concerns" about the proposed sales and saying it would have been better to "hit the pause button" on the deal.
Washington raised fresh concerns on Wednesday, with the American ambassador to the EU telling the European Parliament the sale was unwelcome given the situation on the ground in Ukraine.
British Prime Minister David Cameron, meanwhile, said it would be "unthinkable" to fulfil such a contract in his own country, sparking a sharp riposte from Paris, which noted there were "quite a few Russian oligarchs in London".
Since the beginning of the summer, some 400 Russian sailors have been training in Western France on the operation of the first warship, named "Vladivostok".
The concern in France is that it not only loses the receipts from this sale but also that its credibility as a weapons exporter is compromised.
But there have been precedents for an arms delivery to be scrapped due to international events.
In 1967, then French president Charles De Gaulle cancelled a warship delivery to Israel amid an arms embargo imposed in the wake of the Six-Day war.