Russia closes $1bn deal for French warships

Russia signed a contract worth more than €1 billion (£880?million) yesterday to buy two French warships - the largest ever military deal between a Nato country and Moscow.

President Dmitry Medvedev oversaw the signing ceremony in St Petersburg. French President Nicolas Sarkozy welcomed the deal in a statement.

It said the Mistral class amphibious assault ships would be made in France by DCNS and STX at a shipbuilding plant in Saint-Nazaire, creating 1,000 jobs in France over four years. The contract signing "testifies to the strategic dimension of this co-operation between France and Russia," it said.

Talks on the deal have dragged on for months amid disputes about how many ships would be built and where, and how much sensitive technology France would share. Russian navy chief, Admiral Vladimir Vysotsky said the navy would use the ships as command centres. The Mistral, which can carry 16 helicopters and dozens of armoured vehicles, would allow Russia to land troops in amphibious assaults.