UPDATE 4-Costs, delays scupper Airbus A400M sale to S.Africa

* Cancels $5.2 bln deal to buy 8 planes

* Government says unaffordable burden on taxpayer

* Still seeking military air transport alternatives

* Shares in Airbus parent EADS (EAD.PA) down 0.5 percent

(Adds detail on deal value in paragraph 20)

By Wendell Roelf

CAPE TOWN, Nov 5 (Reuters) - South Africa cancelled a $5.2 billion contract to buy eight Airbus A400M military transport planes, rattling aerospace group EADS which is already fighting to save the troubled project from cost overruns and delays.

South African cabinet spokesman Themba Maseko called the deal an "unaffordable burden on the taxpayer" at a time when Africa's biggest economy is struggling to emerge from its first recession in 17 years and government borrowing has risen sharply.

The minister in charge of South Africa's forces, which have taken a leading role in peace-keeping operations in Africa, said the country still needed to update its transport fleet, raising the prospect Airbus's loss could benefit U.S. rivals.