NICOSIA, April 24 (Reuters) - French President Emmanuel

Macron and German Chancellor Friedrich Merz on Friday tasked

their defence ministries with continuing to work on the

contentious Franco-German FCAS fighter jet project, officials

said.

Plans to develop a futuristic air combat system together

with Spain have been hanging by a thread amid a public dispute

over control between France's Dassault Aviation and Airbus,

which represents Germany and Spain in the 100 billion euro

($116.85 billion) project.

"No, not at all," Macron said when asked by a reporter if

the FCAS project was dead. The French president said he had just

discussed the issue with Merz on the margins of a summit of EU

leaders in Cyprus.

"We had a good discussion this morning with the chancellor, and

we gave a mandate to our defence ministries to work precisely on

several areas, on a range of different issues," he said. "Not

just the future combat aircraft, but various levers of

cooperation between our two countries."

A German government spokeswoman confirmed the discussion

between the two leaders.

"The Chancellor and the President instructed their defence

ministers to continue working on various areas of cooperation

and to agree on the next steps. This work will be completed in

the coming weeks," the spokeswoman said.

On Wednesday, Germany and France's defence ministers had

offered differing timelines for a decision on the fighter jet

project, with one saying the two countries' leaders would decide

soon and the other saying mediators had sought more time to

discuss the matter.

The dispute centres on leadership of the core fighter

element of plans to build an interconnected fleet of crewed

planes and armed drones under a common digital umbrella.

Insiders have been expecting Germany and France to abandon

development of the joint fighter jet but continue cooperation on

drones and the so-called combat cloud, or digital backbone,

which would enable data exchange between jets, drones and other

sensors such as ground radar. But rowing back the plan would be

politically awkward for Macron.

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