France on Saturday accused Australia and the United States of lying over a ruptured Australian contract to buy French submarines, warning a grave crisis was underway between the allies.

Australia's decision to break a deal for the French submarines in favour of American nuclear-powered vessels sparked outrage in Paris, with President Emmanuel Macron recalling France's ambassadors to Canberra and Washington in an unprecedented move.

The row has sparked a deep rift in America's oldest alliance and dashed hopes of a post-Donald Trump renaissance in relations between Paris and Washington under President Joe Biden.

Speaking to France 2 television, Foreign Minister Jean-Yves Le Drian gave no indication Paris was prepared to let the crisis die down, using distinctly undiplomatic language towards Australia, the United States and Britain, which is also part of the three-way security pact.

"There has been lying, duplicity, a major breach of trust and contempt," Le Drian said. "This will not do."

He described the withdrawal of the ambassadors for the first time in the history of relations with the countries as a "very symbolic" act that aimed "to show how unhappy we are and that there is a serious crisis between us".

But Australia has rebuffed French accusations of betrayal, with Defence Minister Peter Dutton insisting Canberra had been "upfront, open and honest" with Paris about its concerns over the deal.

On Sunday, Australian Finance Minister Simon Birmingham said his country had informed the French government "at the earliest available opportunity, before it became public".

He told national broadcaster ABC that it was "always going to be a difficult decision" to cancel the French deal.

"We don't underestimate the importance now of... ensuring that we re-establish those strong ties with the French government and counterparts long into the future," he added. "Because their ongoing engagement in this region is important."

- 'The third wheel' -

Le Drian also issued a stinging response to a question over why France had not recalled its ambassador to Britain, which was also part of the security pact that led to the rupture.

"We have recalled our ambassadors to (Canberra and Washington) to re-evaluate the situation. With Britain, there is no need. We know their constant opportunism. So there is no need to bring our ambassador back to explain," he said.

Of London's role in the pact under Prime Minister Boris Johnson, he added with derision: "Britain in this whole thing is a bit like the third wheel."

NATO would have to take account of what has happened as it reconsiders strategy at a summit in Madrid next year, he added.

France would now prioritize developing an EU security strategy when it takes on the bloc's presidency at the start of 2022, he said.

Admiral Rob Bauer, chair of NATO's Military Committee, earlier played down the dangers, saying it was not likely to have an impact on "military cooperation" within the alliance.

- 'Resolve our differences' -

Biden announced the new Australia-US-Britain defence alliance on Wednesday, in a pact widely seen as aimed at countering the rise of China.

It extends American nuclear submarine technology to Australia, as well as cyber-defence, applied artificial intelligence and undersea capabilities.

The move infuriated France, which lost a contract to supply conventional submarines to Australia that was worth Aus$50 billion ($36.5 billion, 31 billion euros) when signed in 2016.

Le Drian has described it as a "stab in the back" and said the behaviour of the Biden administration had been comparable to that of Trump, whose sudden changes in policy long exasperated European allies.

State Department spokesman Ned Price on Saturday stressed the "unwavering" US commitment to its alliance with France.

"We hope to continue our discussion on this issue at the senior level in coming days, including at UNGA next week," he said, referring to the United Nations General Assembly, which both Le Drian and US Secretary of State Antony Blinken will attend.

Australia has also shrugged off Chinese anger over its decision to acquire the nuclear-powered submarines, while vowing to defend the rule of law in airspace and waters where Beijing has staked hotly contested claims.

Beijing described the new alliance as an "extremely irresponsible" threat to regional stability, questioning Australia's commitment to nuclear non-proliferation and warning the Western allies that they risked "shooting themselves in the foot".

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With Australia-UK deal, Biden again shows China is paramount priority
Washington (AFP) Sept 16, 2021
Forging a new three-way alliance with Britain and Australia to the anger of the French, US President Joe Biden has again made brutally clear - his top international priority, overriding all else, will be facing China. Under the alliance christened with the acronym AUKUS, Australia will be the only country other than Britain to have access to US technology to build nuclear-powered submarines - which could deploy in contested waters where Beijing is assertively exerting its claims. The announcem ... read more