Greece will honour a deal to buy three frigates from France, Paris and a source in the Greek defence ministry said Saturday, after a competing offer from the US threatened to overturn the contract.

"Since we have been in discussion with the Greeks, the American offer is no longer on the table... We also signed the contract with the Greeks. It was initialled a few days ago," France's armed forces ministry told AFP.

A source at Greece's defence ministry said "the agreement is on and moving forward".

"It has been done at the highest possible level. The Greek prime minister himself has announced it," the source told AFP on Saturday.

On Friday the US State Department said it had approved the sale for $6.9 billion of four Lockheed Martin combat frigates, known as multi-mission surface combatant ships.

The announcement suggested France faced a fresh commercial arms deal threat after the US wrested away a massive submarine contract for Australia in a shock announcement on September 15 that ruptured relations between Washington and Paris.

France recalled its ambassadors to the United States and Australia and labelled it a "stab in the back" by an ally when Canberra ditched a longstanding deal worth billions of euros to buy conventional French submarines for US nuclear-powered vessels.

Later in September, Greek Prime Minister Kyriakos Mitsotakis sealed a memorandum of understanding with French President Emmanuel Macron to buy three and possibly four French Belharra frigates for three billion euros ($3.5 billion).

However France said that this time -- unlike for the Australian submarine deal -- the US had given Paris advance warning of its announcement.

"The Americans had warned us that this announcement was going to come out," the armed forces ministry said.

"They wrote to us, saying that 'as part of good relations, following the AUKUS problem, we are warning you'," it said, using the name given to the Australia-UN-US pact that sunk France's submarine deal with Canberra.

"There is no inclination (on their part) to go further," the ministry added.

"What happened there was just a result of an administrative process, which it was apparently complicated for them to stop from an administrative point of view."

On Friday, the US Defence Security Cooperation Agency also approved a $2.5 billion Lockheed program to upgrade Greece's MEKO class frigate, including adding and upgrading weapons systems and electronics.

The French ships would be built by Naval Group for delivery to the Greek navy in 2025 and 2026.

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US offers Greece frigate deal in competition with France
Washington (AFP) Dec 10, 2021
The US State Department announced on Friday the approval of the potential sale of naval frigates to Athens to challenge a deal announced between France and Greece in September. The Defense Security Cooperation Agency said it had approved the sale for $6.9 billion of four Lockheed Martin combat frigates, known as multi-mission surface combatant ships, just 10 weeks after Athens signed a memorandum of understanding with Paris on a similar deal for French-built ships. The agency also approved a $2. ... read more