Bucharest  - Romania has halted the sale of money-losing aircraft maker Avioane SA to Czech company Aero Vodochody because of a contract dispute, the country's privatization agency said Monday.

Aero, which beat bids by Italy's Alenia Aeronautica and a Romanian company, failed to accept the proposed privatization contract by the deadline date, the agency, known as AVAS, said in a statement.

AVAS plans to reopen bidding for Avioane, which builds military training aircraft, the statement said.

Aero won the tender in July after offering 16.3 million euros (25.9 million dollars) in a deal including the purchase of 81 per cent of Avioane's share capital.

But the Czech company made demands during the negotiations that "go against all rules in a democratic country and a free-market economy, and were unacceptable," AVAS said without elaborating.

Based in the industrial centre of Craiova, Avioane builds a military trainer in cooperation with Israeli company Elbit Systems.

Avioane, like Aero, made warplanes when both countries were part of the Soviet bloc, but the Romanian company, founded in 1972, has struggled financially in recent years.

Both countries are now in the European Union - the Czech Republic since 2004 and Romania since 2007. (dpa)