The German Environment Minister Juergen Trittin is reported to have said no compensation will be paid for the termination of contracts for the reprocessing of his country's nuclear waste in France.

"The German minister maintained that there was no legal basis for compensation" , French Info radio said.

Juergen Trittin and Dominique Voynet: Point the way to resolving the nuclear issue

The German Government is looking to cancel nuclear reprocessing contracts under pressure from the Green Party, a member of the coalition government there.

Franco-German talks

Mr Trittin is holding talks with his French counterpart Dominique Voynet in Paris.

Ms Voynet said that Trittin had told her that "Germany would take back its nuclear waste currently in France", the radio said.

But another French government minister said Germany must honour its nuclear commitments.

Education, Research and Technology Minister Claude Allegre told French Europe 1 radio that "the French government will be very firm about this. Contracts were signed. These contracts must be honoured. That is how international law works".

Mr Trittin and Ms Voynet have agreed to set up a working group to deal with the ending of German nuclear waste reprocessing in France.

Germany is the UK's second largest overseas customer in nuclear waste

France's nuclear reprocessing plant at La Hague stands to lose $5bn (�3bn), through the terminating of the contracts.

But Germany's nuclear lobby has accused Chancellor Gerhard Schr�der of going back on promises to their industry.

Nuclear industry executives told German newspapers there would be no sense in attending talks to agree on the country's planned pull-out from atomic energy if the government's reform draft was not changed.

"There are very problematic positions which do not tally with what was agreed in the meeting with the Chancellor on December 14," Otto Majewski, head of Viag AG's Bayernwerk nuclear operator, told Die Welt daily. But German government spokesman Uwe-Karsten Heye said Mr Schroeder was confident the talks, scheduled for 26 January, would go ahead.

Mr Trittin said he would launch a bill this month launching the gradual phase-out of Germany's 19 reactors.

UK dimension

British Nuclear Fuels deny jobs in the UK are threatened by the possible cancellation of German contracts worth �1.2bn.

British Nuclear Fuels say any 'binding' contract that might be terminated would incur heavy costs for the Germans.

BNFL's Bill Anderton told BBC News Online: "These contracts are incredibly robust and have strong penalty clauses.

"As the German business is roughly 10% of that of Thorp it would be a disappointment but we would expect to recoup much of the money from the contracts and it would not be a blow to the viability of the plant.

"It should not have any knock-on effect on jobs."

The economic viability of Thorp in the UK could be threatened

The German Government is looking to terminate deals to reprocess 2,000 tonnes of spent nuclear fuel over the next 10 years.

The decision is already said to have provoked a furious reaction from the UK government with Trade and Industry Secretary Stephen Byers demanding that the Germans honour "legally binding" contracts.

Load of rubbish

The �1.8bn Thorp reprocessing works, which opened only four years ago, has contracts which run to 2009 from a variety of overseas customers.

More than 2,000 people are employed at Thorp and a further 6,000 at the Sellafield site managing spent fuel brought in from companies around the world.

Japan brings in the largest amount of business and Germany is second.

Germany's environment minister Jurgen Trittin, the leading Green in the new coalition government, announced the cancellation on Thursday.

Legislation will be introduced in Bonn on January 27 making it illegal to reprocess German waste from 1 January, 2000.

Mr Trittin is expected to visit London on Wednesday for talks with Michael Meacher, the environment minister, and Mr Byers.

Environment groups are pleased with the news because reprocessing is the biggest single producer of nuclear waste.

But the announcement dealt a blow to Britain's largest remaining state-owned industry, British Nuclear Fuels, who said it was "disappointed rather than dismayed".

The Thorp plant is currently out of action after four years of operation dogged by technical problems.

Nuclear waste held in ponds

It planned to reprocess 7,000 tonnes of spent fuel in the first 10 years of operation, including 1,000 tonnes from Germany, to make an overall profit of �500m.

A further 1,000 tonnes would be dealt with in the following five years.

Up to April last year, only 56 tonnes of the German contract had been reprocessed and the rest is being held underwater in giant cooling ponds.

This would be returned to Germany if its government refused to have it reprocessed.