BERLIN, Aug 26 (Reuters) - French industry is blocking

entry into the next phase in the development of the

Franco-German fighter jet FCAS by demanding sole leadership of

the project, the German defence ministry says in a document seen

by Reuters on Tuesday.

In the document, sent to members of the German parliament's

budget committee on Friday, the ministry warns of severe

consequences for the capabilities of the future fighter jet and

the participation of German industry if concessions are granted

to French industry.

Options for a solution will be worked out by the end of this

year before a decision about further steps is taken, the

ministry says in the document.