France confident UK won't quit A400M - source

PARIS, July 2 (Reuters) - France is confident Britain will commit to the Airbus (EAD.PA) A400M military transport plane but disagreements remain over how to share out the costs of delays to the programme, a French presidency source said on Thursday.

The A400M, which would be built by European planemaker Airbus (EAD.DE), has faced repeated production delays and cost overruns. European nations involved in the project on June 22 postponed a decision on whether to commit to it for good.

"The question is to know ... what balance we are going to find between the states and (Airbus parent) EADS to overcome both scheduling and financing difficulties," said the senior official at President Nicolas Sarkozy's office.

The source was speaking to reporters ahead of a summit in France on Monday between Sarkozy and British Prime Minister Gordon Brown, during which the A400M will be discussed.

British defence procurement minister Quentin Davies signalled during a meeting on the A400M last month in Spain that much progress needed to be made to rescue the 20 billion euro ($28 billion) troop and equipment transporter.

Davies declined to say whether Britain would remain part of the programme, which also involves France, Germany, Spain, Belgium, Luxembourg and Turkey.

Asked whether the British were preparing to drop out, the French presidency source said: "The answer is no."

The official said Britain, like other countries involved in the A400M including France and Germany, faced tough budget constraints due to the recession.

"At the same time, the fact is that Britain and France need transport planes and will have to buy some one way or the other.