Arms Deal with Libya

The first contract, worth 168 million euros for the Milan missiles, was almost complete.

"The contract is ready to be signed," a spokeswoman for MBDA, the missiles systems subsidiary of EADS, said in Paris.

A second contract worth 128 million euros for communication systems was also close to completion, she said.

First arms deal

It is the first arms agreement with a European country since the lifting in 2004 of a European embargo on weapons sales to Libya, the source added.

French Defense Minister Herve Morin confirmed to RTL television channel earlier Friday that Libya had made a declaration of its intention to buy Milan-type missiles and radio systems.

A multi-ministerial commission had approved the arms deals in February. France would be the first country to deliver weapons to Libya following the end of an international arms embargo on the North African country.

Meanwhile, the Libyans were not officially confirming the deal that President Moammar Gaddafi's son Saif had revealed earlier in the week to the French Press.

"Gadhafi's son does not exercise any official office in this country, which is why what he says is not binding for the state," Arabic newspaper al-Sharq al-Aswat reported Friday, citing a Libyan government official.

Quid pro quo?

Saif al-Islam Gadhafi had told Le Monde newspaper that a deal had been reached between the French and Libyan governments which led to the release last week of six Bulgarian medics who had spent eight years in Libyan custody -- some of it on death row -- for deliberately infecting 400 children with HIV.

The five nurses and one Palestinian-born doctor had been "scapegoats," Saif said, adding that he had never believed they were guilty.

Experts had also cast doubt on their convictions, saying poor hygiene had led to the infections.

A foundation led by Saif reached an agreement with Bulgaria and the European Union in July whereby the families of the infected children would receive compensation, which led to the medics' ultimate extradition to Bulgaria last week where they were pardoned.

The government in Sofia announced Thursday that it would forgive Libyan debts of 41 million euros which would be transferred to the International Fund for the Support of AIDS-infected Children in the Libyan port city of Benghazi.

France rejects criticism

France has been criticized for signing a memorandum since the medics were released to deliver a nuclear power station to Libya for civilian use.

French President Nicolas Sarkozy has repeatedly denied that there was any connection between the nuclear agreement and the release of the medics.

France's opposition parties have demanded that a commission be set up to look into the arms deals.

"Do we have to sell arms, of all things, to a country like Libya, when Gadhafi stands accused of organizing (terrorist) attacks?" Socialist Party leader Francois Hollande asked.