BBC News Online: World: Europe

Turkey deals France new blow

The decision was a reaction to French President Jacques Chirac's approval of a bill which accuses the Ottoman Turks of committing genocide against the Armenians - a charge Turkey denies.

Turkey promised economic reprisals and withdrew its ambassador from France following a vote in favour of the bill in the French parliament on 18 January.

Further retaliation

The tender was to build a highway and either a bridge or an undersea tunnel crossing Izmit bay in north-west Turkey and was worth up to $1.5bn.

One consortium included the French company Bouygues, while Campenon Bernard and Transroute International participated in the other consortium bidding for the contract.

But other companies will also suffer from the decision. Turkish, Italian, German and Spanish firms were also involved in the consortia.

Last week, Turkey cancelled a $200m contract with the French company Alcatel for a spy satellite.

Mr Aydin said his ministry would continue to re-evaluate French participation in tenders as long as the Turkish economic sanctions over the genocide bill are in force.

The Turkish Television station NTV has also reported that a $200m contract with the French electronics group Thales has been cancelled and that French firms have been excluded from a large wheat tender.

France is one of Turkey's main trading partners.

Conflicting accounts

The genocide bill has sparked daily protests in front of French diplomatic missions and trade unions have called for boycotts on French goods.

Armenians say 1.5 million of their people died in an Ottoman Empire campaign to force them from eastern Turkey between 1915 and 1923.

But Turkey says the death count is inflated and that Armenians were killed or displaced as the Ottoman Empire tried to quell civil unrest.

The US House of Representatives held off a similar resolution to France's last year amid fears it could seriously damage relations.