France denies president involved in Libya arms deal

PARIS, Aug 4 (Reuters) The French president was not directly involved in an arms deal with Libya this week, a senior executive at the European defence and aerospace group EADS and a presidential palace official said today.

France has denied the sale of anti-tank missiles and radio systems to Libya was linked to the release of a group of foreign medics jailed for infecting children with HIV.

The medics were freed hours before French President Nicolas Sarkozy's visit to Tripoli last month.

''Commercial negotiations between MBDA and the Libyan authorities had been going on for a long time and we never intervened to speed up their conclusion,'' Claude Gueant, secretary general at the French presidential palace, told the French daily Le Figaro.

''I repeat this subject (the arms deal) has never been tackled during our discussions on the release of the Bulgarian nurses.'' However, Gueant acknowledged the French president's visit could have created a ''favourable climate'' to conclude talks.

EADS said yesterday 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 it was in advanced talks on supplying radios.

The agreement would mark the first arms deal between Libya and a Western country since the 2004 lifting of an international weapons embargo. The deal has not yet been officially signed.

''Over the 18 months that have gone by, there has not been any direct intervention by the Elysee (the French presidential palace),'' Marwan Lahoud, marketing and strategy chief at EADS, told French radio Europe 1 today.

''The contract was absolutely not on the agenda during Nicolas Sarkozy's visit to Libya.'' Opposition Socialists have called for a parliamentary commission of inquiry to establish whether the sale was related to the release of the medics. ''The French president has nothing against it as we have nothing to hide,'' Gueant told Le Figaro.

EADS has made no comment on the value of the deals but a Libyan source said they were worth a total of 405.8 million dollars.

Libya and France also signed a memorandum of understanding for cooperation on a nuclear energy project during Sarkozy's visit.

REUTERS PY HS1632