France has plunged into an unprecedented diplomatic crisis with the United States and Australia after it recalled its ambassadors from both countries over a trilateral security deal that sank a French-designed submarine contract.

Foreign Minister Jean-Yves Le Drian said in a statement on Friday that the rare decision taken by President Emmanuel Macron was made due to the seriousness of the matter.

On Thursday, Australia said it would scrap the $US40 billion ($A55 billion) deal with France’s Naval Group to build a fleet of conventional submarines and would instead build at least eight nuclear-powered submarines with US and British technology after striking a trilateral security partnership. France called it a stab in the back.

A White House official said the United States regretted the French decision and Washington had been in close touch with France over it. The official said the United States would be engaged in coming days to resolve differences with France.

Australia’s embassy in Washington did not immediately respond to a request for comment.

The foreign ministry statement made no mention of Britain, but a diplomatic source said France considered Britain had joined the deal in an opportunistic manner.

Le Drian said the deal was unacceptable.

“The abandonment of the submarine project … and the announcement of a new partnership with the United States aiming at launching new studies for future possible nuclear propulsion co-operation is unacceptable behaviour between allies,” he said.

“The consequences touch the very concept that we have of alliances, our partnerships and the importance of the Indo-Pacific for Europe.”

US Secretary of State Antony Blinken tried on Thursday to calm the French outcry, calling France a vital partner in the Indo-Pacific.

Earlier on Friday, Australian Prime Minister Scott Morrison rejected French criticism that it had not been warned about the new deal, saying he had raised the possibility in talks with the French president that Australia might scrap the 2016 submarine deal with a French company.

Morrison acknowledged the damage to Australia-France ties but insisted he had told Macron in June that Australia had revised its thinking.

The French announcement came as Australian Foreign Minister Marise Payne was speaking at the American Enterprise Institute think tank in Washington. She gave no sign she was aware of it.

Referring to the submarine deal, Payne said such commercial and strategic decisions were difficult to manage, but, responding to a question, she said there was “no question” that France remained a valued ally.

“I absolutely understand the disappointment,” she said.

“My task is to work as hard as I can … to make sure that they do understand the value we place on the role that they play and do understand the value we place on the bilateral relationship and the work we want to continue to do together.”

France is about to take over the presidency of the European Union, whose new Indo-Pacific strategy includes seeking a trade deal with Taiwan and deploying more ships to keep sea routes open.

AAP

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