Australia says return of French ambassador to aid repair of bilateral relationship

Australian Foreign Minister Marise Payne arrives at United Nations headquarters in New York on September 21, 2021. John Minchillo/Pool via REUTERS

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CANBERRA (Reuters) - Australia's Foreign Minister Marise Payne said on Thursday the return of France's ambassador to Canberra will help repair relations between the two countries which were damaged when Australia cancelled a $40 billion submarine contract.

Australia last month walked away from a deal with France's Naval Group to build a fleet of conventional submarines and will instead build at least eight nuclear-powered submarines with U.S. and British technology after striking a trilateral security partnership with those two countries.

The cancellation angered France, which accused both Australia and the United States of stabbing it in the back and Paris recalled its ambassadors from Canberra and Washington.

France said on Wednesday that Jean-Pierre Thebault would return to Canberra but did not set a date.

"We will work with France to move forward with our relationship. We recognise this will take time and ongoing engagement following our submarine decision. The return of the Ambassador is a welcome step in this process," Payne said in a statement.

In solidarity with France, the EU last week postponed the next round of talks with Australia over a free trade deal.

(Reporting by Colin Packham; Editing by Edwina Gibbs)