By Lidia Kelly and Stefica Nicol Bikes

MELBOURNE (Reuters) – Australia has made a “huge” diplomatic error, the French ambassador said on Saturday having been recalled to Paris after Canberra ditched a multi billion dollar order for French submarines in favour of an alternative deal with the United States and Britain.

“I think this has been a huge mistake, a very, very bad handling of the partnership – because it wasn’t a contract, it was a partnership that was supposed to be based on trust, mutual understanding and sincerity,” Ambassador Jean-Pierre Thebault told journalists in Canberra.

Australia declared on Thursday that it would cancel the agreement in 2016 to allow France’s Naval Group build a fleet conventional submarines. Instead, Australia would make at least eight submarines powered by nuclear technology using U.S.- and British technology. This was after the conclusion of a trilateral partnership nL1N2QH2X7.

France called it a “stab in the back” and sent its Ambassadors to the United States and Australia to be recalled. The deal was worth $40 billion and estimated today at a much higher value.

Thebault declared, “I’d like to go into a machine and not end up in such a terrible, clumsy or inadequate un-Australian position.”

While I’m sad to have to go, it needs to be acknowledged that there is a need to reevaluate the situation.

Australia expressed regret at the recall of French Ambassador and said that France was important to Australia and will continue engaging with Paris in other matters.

A spokesperson for Foreign Affairs Minister Marise Penny said that Australia understood France’s disappointment at the decision. The statement was made in accordance to our clearly communicated national security interest. L4N2QJ3JI

U.S. State Department spokesperson Ned Price said that France was a ‘vital ally’ and that the United States would be engaged in coming days to resolve the differences.

This row is the most serious in Australia-France relations since 1995 when Canberra protested France’s decision to restart nuclear testing in South Pacific. It also recalls its ambassador to consults.