French company Naval Group has welcomed Australia’s $830 million compensation offer for the failed submarine deal that caused the French president to accuse former Prime Minister Scott Morrison of lying.

In a statement, the majority state-owned company said the payment was “fair and equitable”.

“Naval Group and the Commonwealth of Australia have reached a fair and equitable settlement to bring a conclusion to the Future Submarine Program.

“Naval Group pays tribute to all individuals, teams, and its partners who have worked and delivered on this program for more than five years.”

Australia is making the multimillion-dollar settlement after scrapping a defence contract in which Naval Group would have built submarines in South Australia.

Australia’s current fleet of Collins submarines were to have been replaced by a conventional fleet constructed by Naval Group.

However that deal was abandoned by the Morrison government, which decided to instead pursue nuclear-powered submarines under the AUKUS partnership.

Prime Minister Anthony Albanese said his government had reached a fair and equitable settlement with Naval that would “rule a line” under the torn-up contracts.

As part of the arrangement, Australia will pay Naval Group $555 million euros or about $AU830 million.

“It follows, as well, discussions that I’ve had with President (Emmanuel) Macron and I thank him for those discussions and the cordial way in which we are re-establishing a better relationship between Australia and France,” Mr Albanese told reporters in Sydney.

It was initially thought the about-face on the French deal would cost taxpayers up to $5.5 billion but Mr Albanese says the total has come down to $3.4 billion, taking into account monies already paid.

“It still represents an extraordinary waste from a government that was always big on announcement but not good on delivery,” he said.

The payment has sparked debate over whether Australia is paying too much, with Independent Senator Rex Patrick, a former submariner, telling the ABC it was too generous.

“I think there will be champagne corks popping in Cherbourg this weekend,” Senator Patrick told the ABC, referencing Naval Group’s French base.

Shadow Defence Minister Andrew Hastie said the Morrison government had been aiming to pay a “significantly lower figure”.

Mr Albanese said some of the details of the settlement would remain confidential because of their commercial nature.

The Prime Minister hoped the settlement meant Australia could now move forward in mending its relationship with France, describing that country as a partner for Australia with deep historical ties, especially in the Indo-Pacific region.

“I’m looking forward to taking up President Macron’s invitation to me, to visit Paris at the earliest opportunity,” he said.

 

—with AAP