Jet fighter deal engulfed by floods

The $2bn order (£1.3bn) would have been the country's largest arms purchase in history.

A spokesman for the defence ministry told the Reuters news agency that defence minister Jaroslav Tvrdik would not submit the purchase request to the cabinet.

The Jas-39 Gripen aircraft is produced by a consortium of Sweden's Saab and the UK's BAE Systems and was supposed to bring the Czech Republic's air defences up to Nato standard.

The planes were due to be delivered over three years up to 2007, and were to replace the country's ageing fleet of Soviet-built Mig-21 planes.

Damage assessment

But as the defence minister himself acknowledged, spending that much money on military hardware had to be "ruled out" after floods devastated Prague and other towns along the Vltava river and forced 220,000 Czechs to abandon their homes.

Speaking to Czech news agency CTK, Mr Tvrdik said: "In my view the process of acquisition of 24 supersonic fighters is now dead for the Czech Army. I will propose its ending to the government and I will submit alternatives of guarding the air space."

As the waters subside, officials have begun to assess the damage to buildings and infrastructure.

Many buildings are expected to suffer further damage and cave in as they dry out.

Officials say it will take months to bring Prague's subway system back on track.

Early estimates suggest that the flood's total bill could amount to at least 60bn crowns ($2bn, £1.24bn).

Finance minister Bohuslav Sobotka has pledged to keep the country's budget deficit on target.

Extra money, he said last Friday, would have to come from spending cuts and privatisation revenues.

The defence ministry, meanwhile, is considering an alternative plan to shore up the country's air defences.

One option is to buy second-hand aircraft, possibly from a Nato partner. Alternatively, the government could postpone the purchase for a few years, hoping that the Mig 21 fighters will last a few more years.

The Gripen was already seen as a cheap option, at least when compared to buying more advanced but far more expensive aircraft like the US-built F16 or the European Typhoon Eurofighter.