French PM says fighter jet project on track but Dassault denies deal

BERLIN (Reuters) -Companies involved in jointly developing a next-generation European fighter jet named FCAS agree on how to move forward, the French prime minister said on Friday at a joint news conference with German Chancellor Olaf Scholz.

"An agreement has been reached between our industrial companies, this requires approval by the states and I think the process is ongoing," French Prime Minister Elisabeth Borne said.

Dassault Aviation, which is spearheading the project which also includes Thales and Airbus, immediately denied a deal had been reached.

"It is not done yet," a spokesperson told Reuters.

It is the second time this month that conflicting political and industrial signals have emerged over the talks on the next phase of the project. Dassault Chief Executive Eric Trappier last week denied a German government declaration which had also suggested a deal had been reached.

Speaking at the same event on Friday, Olaf Scholz took a more cautious stance, saying political leaders had been able to speed up talks on the project.

French President Emmanuel Macron and then German Chancellor Angela Merkel first announced plans in July 2017 for FCAS, which will include a fighter jet and a range of associated weapons, including drones.

Lately, the project - originally meant to unify Europeans after the migration crisis and Britain's decision to leave the European Union - has been a source of tension between the two countries.

(Reporting by Rachel More, Tassilo Hummel and Tim Hepher, Editing by Miranda Murray and Christina Fincher)