Here is a timeline of the spat:

- 'Contract of the century' -

On December 20, 2016, France and Australia sign what is dubbed a "contract of the century" that copperbottoms their alliance in the Pacific.

Under the deal France's Naval Group, which is partly owned by the state, will build 12 conventionally powered submarines for Australia, based on France's new Barracuda nuclear-powered subs, which are soon due to enter service.

The contract was worth Aus$50 billion ($36.5 billion, 31 billion euros) on its signing in 2016. It has been revalued to 56 billion euros to take account of inflation over the length of the programme.

Under the accord the two countries would cooperate over 50 years and the submarines would be constructed in an Adelaide shipyard, with the delivery of the first sub slated for 2030.

The project was expected to create some 2,800 jobs in Australia, according to the Australian government.

- Naval Group criticised -

However Australia claimed Naval Group were running behind schedule and over budget.

The group's CEO Pierre Eric Pommellet went to Adelaide for three weeks in February to take part in fraught negotiations.

On June 2, Greg Moriarty, the top civil servant in Australia's Department of Defence, set alarm bells ringing in Paris after he raised the possibility of "alternatives" to the French deal because of ongoing difficulties.

Later in June, during a visit by Australian Prime Minister Scott Morrison to Paris, President Emmanuel Macron promised "full and complete" commitment to the deal.

As recently as August 30, defence and foreign ministers from Australia and France "underlined the importance of the Future Submarine programme."

- Contract ditched -

Events took a dramatic turn on September 15 when Morrison announced that Australia would get more silent nuclear-powered US submarines as part of a surprise new defence alliance -- AUKUS -- between Britain, Australia and Washington in the Indo-Pacific region.

Under the deal Australia would no longer buy the French submarines.

Furious France called the U-turn "a stab in the back".

The White House says its officials held high-level talks with Paris before announcing the deal, but France insists it was taken by surprise.

- Paris recalls ambassadors -

On September 17 Paris recalled its ambassadors to Canberra and Washington, an unprecedented act.

Foreign Minister Jean-Yves Le Drian said "there has been lying, duplicity, a major breach of trust and contempt," saying there was a "serious crisis".

A meeting planned this week between the French Defence Minister Florence Parly and her British counterpart Ben Wallace was cancelled by Paris.

Morrison says the French government would have known Canberra had "deep and grave concerns" about French submarines.

- EU backs Paris -

The European Union supported France on September 20, with chief Ursula von der Leyen saying France was treated in an "unacceptable" way.

A day later German Europe Minister Michael Roth says France's diplomatic crisis with the US was a "wake-up call for all of us".

He said the often divided EU must unite on foreign and security policy.

German Foreign Minister Heiko Maas said the decision "and the manner in which it was decided, was irritating and disappointing, and not only for France."

- Biden talks -

US President Joe Biden and Macron hold phone talks Wednesday, with both agreeing that "open consultations among allies" could have avoided the crisis.

After the talks, Macron orders the French ambassador to return to the US next week.

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NAVAL GROUP