Britain's defence firms have been handed a major lifeline after Emmanuel Macron dropped his demands for a post-Brexit military deal to be dependent on fishing rights.
With international talks on a peace deal with Ukraine still yet to reach a conclusion, the French President has been urged by other EU leaders to treat the issues separately - which comes just days after the bloc's own foreign affairs chief Kaja Kallas said France's stance on the matter was "surprising".
A deal could open the door for British firms to bid for contracts under the EU's €150billion-valued defence fund, a mega investment drive unveiled last month aimed at enabling countries to re-arm quicker.
And one Brussels source told the Mail: "Even Emmanuel Macron isn’t stupid enough to let fish get in the way."
Emmanuel Macron is said to have dropped his demands for a post-Brexit military deal to be dependent on fishing rights
PA
The source's claim marks an apparent U-turn by France - which, backed by the likes of Denmark, insisted on a "fish-for-defence" gambit at a key meeting of EU ambassadors in Brussels last Friday.
That was the call which prompted Kallas to say: "I'm surprised how important the fish are given the security situation."
But Sandro Gozi, an ally of Emmanuel Macron who leads the European Parliament's Brexit "reset" efforts, has maintained the UK must resolve the issue of fishing rights to build "trust" with Brussels - as the current UK-EU fishing deal expires next year under the Trade and Cooperation Agreement (TCA).
The TCA allows the UK and EU to fish in each others' waters, and is bound by a quota system. In December, Britain agreed a £310m quota with the EU and Norway to fish for haddock, cod and herring in the North Sea.
MORE ON FRANCE'S DEMANDS:
France, backed by the likes of Denmark, insisted on a 'fish-for-defence' gambit at a key meeting of EU ambassadors in Brussels last Friday
PA
Probed on whether a defence deal could be separated out from issues like fishing rights, Gozi told the i newspaper: "It is not fish versus peace, or fish versus weapons. It is about launching a new partnership, a new agenda by doing two things.
"The first is building a common trust basis that can only be built up by properly, fully implementing the TCA and also tackling the outstanding issues, and among these is fisheries.
"At the same time, in parallel, the partnership has to take stock of the new common interest and challenges in the geopolitical context."
Britain has indicated a willingness to compromise on fish, but does not believe an agreement in this area should be a quid pro quo to a defence deal
PABritain has indicated a willingness to compromise on fish, but does not believe an agreement in this area should be a quid pro quo to a defence deal - a view supported by defence heavyweights Germany and Poland.
Meanwhile, Labour MPs are growing in confidence that a defence deal is within grasp, the i reports.
One said they had been "told a security pact has been done" - which may mean a technical-level deal between UK and EU officials has been struck without political sign-off.
Meanwhile, several sources have hinted that a security deal will likely see Britain included in Europe's £150billion defence fund, although this may mean British firms are only included if they agree to collaborate with European partners.
