(Releads, adds reaction from Italy's Fincantieri)
MOSCOW, July 25 An Italian-Russian project to build a new generation small submarine has been delayed but comments attributed to a senior Russian official that the Ukraine crisis was behind the move were denied by a spokesman for the Italian company involved.
The Itar-Tass agency quoted a senior Russian official as saying the project had been suspended because of the "political situation" following Western sanctions on Russia over Ukraine. An Italian spokesman blamed the delay on timing issues.
The decade-old deal between Russian company Rubin and Italian shipmaker Fincantieri to build a 1,000-tonne diesel submarine, the S-1000, is part of President Vladimir Putin's plans to revamp Russia's fighting force.
"To our regret, due to the well known political situation, this project has been suspended," Itar-Tass quoted Igor Vilnit, the head of Rubin's Central Design Bureau for Marine Engineering, as saying.
Rubin declined immediate comment to Reuters.
Antonio Autorino, a spokesman for Fincantieri, the Italian shipmaker involved in the project, said a working group meeting, due to be held in the middle of the year, had been postponed due to scheduling problems.
He denied the delay was linked to political issues and said the meeting would be rescheduled at a later date.
"The Italian side asked to change the date of a working group meeting which was due to be held in the middle of the year because it clashed with other commitments of some of the participants," he said.
He added that the poject was still at the study phase and "has not reached the final stage".
The latest round of U.S. sanctions targeted Russian arms producers, including some of the most iconic names in Soviet and Russian weaponry.
The downing of a Malaysian passenger jet in eastern Ukraine has also put the spotlight on arms cooperation with Moscow, including French plans to deliver a helicopter carrier to Russia. (Reporting by Alissa de Carbonnel and Giselda Vagnoni, Editing by Timothy Heritage and David Evans)