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Australian Prime Minister Scott Morrison said on Sunday that does not regret terminating a contract with France to supply submarines in favour of a deal with the United States.
The sudden move angered France and prompted Paris to recall its ambassadors to Canberra and Washington.
Morrison said Australia had flagged up doubts over the French subs months ago, and that the US nuclear vessels would serve its interests better in the Indo-Pacific region.
"We formed the view that the capability the attack-class submarines (they) were going to provide was not what Australia needed to protect our sovereign interests," added Morrison.
The French had signed a contract in 2016 for a dozen conventional diesel-electric submarines and the work to make them was already underway.
The deal with the French majority state-owned Naval Group was worth at least €56bn.
France recalled its ambassadors to the US and Australia on Saturday, in what officials said was not a reaction to the loss of the contract but the wider betrayal of trust.
"This is very symbolic," said Jean Yves Le Drian, French Foreign Minister in a TV interview. "There was a lie, there was duplicity, there was a major breach of trust and there was disdain, so things are not going well between us, not at all. It means that there is a crisis."
Canberra 'regrets' diplomatic row with France
The office of the Australian foreign minister, Marise Payne, had earlier issued a statement expressing Canberra's “regret” over France's withdrawal of its ambassador.
It added: “Australia understands France’s deep disappointment with our decision, which was taken in accordance with our clear and communicated national security interests."
France also recalled its ambassador to the United States in a move ordered directly by President Emmanuel Macron.
What is AUKUS?
The security pact known as "AUKUS" was announced on Wednesday by Washington, Canberra and London.
Although none of the three governments made any mention of China, the new partnership is widely understood to be an attempt to counter Beijing's assertiveness in the region.
It plans for deeper diplomatic, security, and defence cooperation between the three capitals with enhanced capabilities and interoperability in cyber, artificial intelligence, and quantum technologies.
Australia will be allowed to build nuclear-powered submarines for the first time, using technology from the US and the UK.
Australian Prime Minister Scott Morrison, British Prime Minister Boris Johnson and US President Joe Biden said in a statement that their partnership is "guided by our enduring ideals and shared commitment to the international rules-based order."
On Thursday, Le Drian blasted the move by the three anglophone countries as "a stab in the back," adding: "This unilateral, brutal, unpredictable decision is very similar to what Mr Trump used to do."
Analysts have warned that France's historic decision to recall ambassadors could mark the beginning of a more severe reaction.
“This is far more than just a diplomatic spat," Peter Ricketts, a former UK ambassador to France, told the BBC. " The withdrawal of ambassadors is the tip of the iceberg."