Libya close to buying missiles from EADS, others

PARIS, Aug 3 (Reuters) Libya is close to buying anti-tank missiles and radio systems from European aerospace and defence group EADS, just days after a visit to Tripoli by President Nicolas Sarkozy, the French government said today.

But France repeated its denials that the sale had been agreed in exchange for the release of a group of foreign medics held in jail for eight years for allegedly infecting Libyan children with HIV.

European defence and aerospace group EADS said its MBDA joint venture with Britain's BAE Systems and Italy's Finmeccanica had finalised an accord to sell Milan anti-tank missiles to Libya and added it was also in advanced talks on supplying radios.

''This (missile) contract is awaiting the signature of the Libyan client, and EADS is happy that the negotiations could be concluded,'' EADS said in a statement.

The company made no comment on the value of the deals but a Libyan source said earlier they were worth a total of 296 million euros (402 million dollars).

Sarkozy's spokesman David Martinon denied any deal had been offered in exchange for the release of the medics, who were freed after a high-profile visit to Tripoli by the president's wife Cecilia last week.

But he said Sarkozy's own visit, which came just hours later, had improved the climate between the two countries and may have helped the deal with EADS.

''It's true that President Sarkozy's state visit to Tripoli was very successful because the negotiations for freeing the nurses had gone through just before and, it seems that greatly accelerated things, to the benefit of French companies,'' Martinon told France Info radio.

PARLIAMENTARY INQUIRY Sarkozy earned widespread plaudits in France after his visit to Tripoli, during which he clinched an accord on defence and signed a memorandum of understanding for a nuclear energy deal.

But the opposition Socialists questioned selling arms to Libyan leader Muammar Gaddafi and called for a parliamentary commission of inquiry to establish whether the sale was related to the release of the medics.

''There's a further question, which doesn't have to do with a commission of inquiry, which is, should we have arms deals with a country like Libya, ruled by Gaddafi?'' Socialist party leader Francois Hollande told France Inter radio.

Libya started emerging from international isolation in 2003 when it agreed to halt a weapons programme prohibited by the United Nations and pay compensation for the bombing of a US airliner over Scotland in 1988 in which 270 people were killed.

The European Union lifted an arms embargo on Libya in October 2004, but Gaddafi's son, Saif al-Islam, has said the ban has effectively remained in place, blaming the Germans for putting the brakes on possible deals.

French Defence Minister Herve Morin said Libya had letters of intent to buy the missiles and radio systems. He rejected Socialist criticism of the deals.

He said they had been under discussion for months and had been cleared in principle by a special French ministerial commission on arms sales in February 2007, before Sarkozy's victory in the May presidential election.

Morin also noted that other European countries, including Britain had been pressing for arms deals with Tripoli.

REUTERS SYU HS1551