TRIPOLI, Libya- A Libyan official said Thursday that Tripoli signed two contracts for missiles and communications equipment with French companies totaling euro296 million (US$405 million).

Meanwhile, French officials denied they made a deal to sell military equipment to Libya in exchange for the liberation of six imprisoned European medics.

The first contract, worth euro168 million (US$230 million), was for Milan missiles, and the second, totaling euro128 million (US$175 million), was for advanced Tetra communications and surveillance equipment for the police, said the Libyan official, speaking on condition of anonymity because he was not authorized to speak to the press.

He did not reveal the names of the French companies.

"This is an important deal because it is the first of its kind that Libya signed with a Western country since sanctions imposed in the early 1990s," the official said.

David Martinon, spokesman for French President Nicolas Sarkozy, refused to confirm the contracts during an appearance late Thursday evening on France's LCI television.

"I do not confirm," Martinon said. But he added, "I imagine it to be true." The spokesman did not give the names of the French companies involved, but suggested one was the European Aeronautic Defence and Space Co.

"It is not my job to speak about the commercial dealings of a company like EADS, which appears to have concluded this deal," he said.

Martinon insisted that no arms contract was signed during Sarkozy's visit to Tripoli last week, the day after the medics' release. He said there was "no compensation of that sort by France" for their release.

Libya allowed the medics to leave for Bulgaria on July 24 on the French presidential plane in the company of first lady Cecilia Sarkozy _ on her second visit to Libya _ and an EU official.

The French president flew to Libya a day later to normalize relations with the African state. The release of the medics, who had spent 8 1/2 years in prison, had been the last major obstacle toward that goal.

Sarkozy announced an initial agreement to sell Libya a nuclear-powered plant, saying the civilian nuclear technology would be used to desalinate sea water.

However, Seif al-Islam Gadhafi was quoted in an interview Wednesday in the French daily Le Monde as claiming that a deal concluded with Libya included the sale of French Milan anti-tank missiles for an estimated euro100 million (US$137 million) and a deal on the joint Franco-Libyan manufacture of military equipment.

It also included an agreement to conduct joint military exercises, he was quoted as saying, adding this would be Libya's first military deal with a Western nation.

Bolstering the claim of Gadhafi's son, the French economics daily La Tribune reported Thursday that Libya may soon sign an order with EADS's missile unit MBDA for the purchase of Milan missiles.

MBDA refused to comment on the report, which did not cite sources or provide details. EADS could not immediately be reached for comment.

However, the paper said the missile maker would benefit from the normalization of ties between the two countries which clear the way for deals under discussion for nearly a year.

Earlier Thursday, French Foreign Minister Bernard Kouchner also denied that France has made a deal with Libya to sell military hardware in partial exchange for the six medics.
"There was no accord, there was no compensation, no money and no specific accord on any arms," Bernard Kouchner said.

Kouchner conceded, however, that in any lengthy negotiations like those that led to the release of five Bulgarian nurses and a Palestinian doctor last month, it is "obvious" that "there is a slightly hidden aspect." He did not elaborate.