Technical talks with the United Arab Emirates were being finalized and that France was expected to cover part of the modernization costs for the gulf state's fleet of Rafale jet fighters, France's Defense Minister Herve Morin has said.

He denied reports, however, that the cost of the plan has increased, telling France Info radio that they were "completely far-fetched."

It has been reported that the remarks spawned from a report in the French daily La Tribune claiming that that the cost of the deal with the United Arab Emirates would climb to between $5.2 and $6.7 billion. Negotiations between France and the gulf emirate have been ongoing for more than a year.

They mark the first signs of a co-development initiative with a foreign partner and customer. They also pave the way for possible provision of the new F4 version model to the French air force and navy.

The La Tribune daily, citing an unnamed source close to the talks, said that the client would "best pay only half (of the bill)," one source close to the talks told the newspaper. France's Ministry of Defense and aerospace giant involved in the project, Dassault Aviation, Thales and Safran, would foot the rest of the bill.

The project concerns the upgrading of 60 Rafale combat aircraft which the United Arab Emirates wants to replace its aging fleet of 60b Mirage fighters.

The project's cost was estimated at $2.47 billion, Morin told France Info radio.

It has also been reported that the twin-engine fighter Rafale is considered Dassault's crown jewel in France's arms industry. Its manufacturer is bidding for lucrative deals in Brazil and India, making pitches also to Libya and Kuwait.

Including French President Nicolas Sarkozy, it has had problems in finding international buyers despite intense lobbying France's highest officials.

Its closest potential buyer appears to be Brazil, which is vying to buy 36 jet fighters in a multibillion dollar tender that has drawn the interest of the world's biggest aerospace companies. (With Inputs from Agencies)