Brazil to choose France's Rafale jet-govt source

* Lula to choose French Rafale jets for Brazil fleet

* Brazil still seeking lower price for Rafale order

* Air force prefers Swedish plane

BRASILIA, Jan 11 (Reuters) - President Luiz Inacio Lula da Silva will choose the French-made Rafale jet as Brazil’s next-generation fighter plane but wants to negotiate a lower price, a cabinet member told Reuters on Monday.

Lula will opt to buy 36 Rafale multi-role aircraft made by France's Dassault Aviation AVMD.PA despite the Brazilian Air Force's preference for the Gripen NG made by Sweden's Saab SAABb.ST, said the minister, speaking on condition of anonymity.

“The government doesn’t decide under pressure from anybody, not even the Air Force. The ball is in the court of the French,” said the minister, “If they reduce the price, we’ll close the deal soon.”

The Rafale is reported to have the highest price of the three finalists in the bidding process, which includes the Boeing Co BA.N F-18.

Last week local media reported the Air Force preferred the Gripen NG because it had a lower purchase and maintenance cost and would allow for more technology to be transferred to Brazil.

Lula’s government said in September it was entering final negotiations with France to acquire the Rafale. Brazil has a strategic defense agreement with France worth billions of dollars, including the local assembly of helicopters and submarines.

Unlike the Rafale, which is a finished product, the Gripen NG would be developed with Brazilian participation, according to an Air Force report cited by local newspapers.

The deal, which could initially be worth more than $4 billion, has sparked fierce competition among aircraft manufacturers.

Latin America’s largest country is seeking a generous technology transfer offer and local assembly. The deal could eventually rise to more than 100 aircraft.

Lula said last year that his final decision on which planes Brazil buys would be political rather than technical. (Writing by Raymond Colitt; editing by John Wallace)