Germany on Wednesday halted a major deal to provide a fully equipped training camp to Russian forces, saying any arms trading with Moscow was currently "indefensible".

Vice-Chancellor Sigmar Gabriel announced the suspension of the Rheinmetall project as Moscow tightened its grip on the flashpoint Crimean peninsula.

The German government said in a statement it was in touch with the defence group, whose contract with the Russian authorities is reported to be worth around 100 million euros ($140 million).

A Rheinmetall spokesman had earlier said the company would fulfil its contractual obligations to build the centre, which German media said would train 30,000 soldiers a year.