Spain-Venezuela plane deal 'off'

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Spain's foreign minister says a plan to sell 12 military planes to Venezuela despite US objections has been dropped as it is commercially unfeasible.

The US, which calls Venezuelan President Hugo Chavez a destabilising force, blocked the use of US-made technology in the planes.

Spanish aircraft maker EADS-CASA had tried to substitute these parts but the idea was too expensive.

Both sides agreed to cancel the deal, Minister Miguel Angel Moratinos said.

"The financial effort needed to adapt to the technological requirements of the United States was not worth it," he said.

Spain and Venezuela agreed the deal last November.

The US argued that President Chavez could use the planes to destabilise the region and blocked the use of US technology.

At the time, Mr Chavez has condemned the US position as "horrific imperialism. "

EADS-CASA is an affiliate of troubled pan-European aerospace company EADS, which also owns Airbus.

The Associated Press news agency reported that the initial price-tag for the deal was $2.2bn, $630m of which was to have been spent on the 10 C-295 transport planes and two CN-235 patrol planes that will now be left out of the contract.