UPDATE 4-Airbus gets reprieve with A400M decision delay

* Countries agree 3-month freeze in A400M plane delays row

* Agree to consult before any decision

* Spain expects deal to keep 20 billion euro Airbus plane (Adds detail on Eurofighter)

PRAGUE, March 12 (Reuters) - Embattled planemaker Airbus won a reprieve over late delivery of the A400M military transport plane on Thursday as governments agreed to postpone a decision on whether to scrap Europe’s biggest arms project.

Speaking after talks between the seven countries that ordered the plane on the sidelines of an EU defence ministers’ meeting in Prague, France said they agreed a three-month moratorium to prevent automatic cancellation.

“This moratorium has been accepted by all countries,” French Defence Minister Herve Morin told Reuters, adding it wasagreed that “no state would take a decision without consulting the others.”

Spanish Defence Minister Carme Chacon, whose country is responsible for assembling the turboprop-driven heavy airlifter, told Reuters it was vital in order to boost European defence.

“Spain is confident this project will in fact go ahead,” she said.

Airbus parent EADS EAD.PA said this week the A400M project could be cancelled on April 1 if NATO nations buying the plane decided in unison to walk away.


Seven countries -- Britain, France, Germany, Spain, Belgium, Luxembourg and non-EU member Turkey -- have ordered at total of 180 of the A400M planes.

Some, notably Germany and Britain, have expressed anger over delays of 3-4 years on the delivery of the plane, which could lead to billions of euros in penalties paid by Airbus.

Airbus has said it would be crippled by the penalties just as it recovers from a crisis over delays to its A380 superjumbo, the world’s largest civil airliner. Blame for the delays has triggered a furious row with engine makers.

German Defence Minister Franz Josef Jung told reporters earlier it was possible the project could be scrapped, but Germany wanted to see it go ahead.

“The company must fulfill all the conditions to guarantee the (project) in the manner that we want to and do this transparently so that we know what we have to expect,” he said.

Morin said the aim was to reach an agreement with EADS on the moratorium this month.

EADS shares trimmed losses to close down 0.2 percent at 9.748 euros on Thursday.

A source familiar with the talks told Reuters there was general support for keeping the project alive, but individual nations were expected to put maximum pressure on EADS.

A British parliamentary panel last month urged Britain to consider abandoning the project and weigh other options for supplying air transport to combat zones such as Afghanistan.

Germany’s Defence Ministry also said in a statement issued later that countries involved in the Eurofighter project -- Germany, Britain, Italy and Spain -- wanted manufacturer EADS to cut the costs for a third tranche of the fighter jet.

It said the countries would delay talks on the order until the end of the month.

“Those responsible for the programme at the NATO Eurofighter and Tornado Management Agency have been charged with negotiating significant reductions in the costs of the fighter system,” said the ministry in its statement.

It said a decision about the commissioning of about 45 percent of the third tranche would be based on the results of those negotiations. (Additional reporting by Tim Hepher, Sabine Siebold, Madeline Chambers; Editing by David Cowell and Andre Grenon) (Writing by David Brunnstrom) ($1 = 0.7826 euro)