The deal, which involves joint construction of the vessels, is the first sale to Russia of such naval high-tech by a NATO country and France's NATO allies, in particular the former Soviet Baltic states, have expressed alarm about arming Moscow with modern Western weaponry.

"Following the October 5 tender to supply the Russian navy with two projection and command ships, the Russian authorities have chosen the consortium of France's DCNS and STX and Russian naval yard OSK," President Nicolas Sarkozy's office said Friday.

"Their offer initially covers the joint construction of two of this kind of vessel, which should be extended by the construction of two more," Sarkozy's Elysee Palace said in a statement.

Russia's choice of the French warships came after French Prime Minister Francois Fillon said on a visit to Moscow earlier this month that France was ready to transfer military technology if it won the tender.

Russia had been in exclusive talks with France to buy two Mistrals but in August the defence ministry announced an international tender as the talks stalled on the question of technology transfer.

Russian Prime Minister Vladimir Putin had stressed that the price and the possibility of technology transfer to allow Russia to subsequently learn to build its own warships of the same class would be key criteria in its choice.

France began negotiations with Russia in 2009 on a possible deal to sell Moscow the Mistral, a powerful warship costing around 500 million euros (650 million dollars).

A Mistral-class ship can carry up to 16 helicopters, four landing craft, 13 battle tanks, around 100 other vehicles and a 450-strong force. It has facilities for a full command staff and is equipped with a 69-bed hospital.

Sarkozy's office said the deal would lead to the creation of 1,000 jobs in French shipyards over four years.

The OSK naval yard said the Russians would be involved in "20 percent of the construction work of the first warship," adding that work on the vessel would start in 2011.

A US diplomatic cable relating a Paris meeting between US Defence Secretary Robert Gates and his then French counterpart Herve Morin said that Washington believed the prospective sale sent a "mixed signal" to both Moscow and Eastern European allies.

Morin disagreed, saying the warship would not alter Russia's overall military power.

"Morin told SecDef (secretary of defence) pointedly that he had pushed hard for the sale. He conceded that it was indeed a warship for power projection," the document said.

"But Morin asked rhetorically how we can tell Russia we desire partnership but then not trust them."

Morin expressed understanding of the US view that Central and East European states saw Russia as a potential threat, but argued "that this single ship would not make any difference with respect to Russian capabilities, as Russia's naval production ability was severely degraded."

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