"We have an agreement to continue our cooperation in the management of this project for the next 12 months," said British Defence Secretary John Reid, who told a news conference he was "absolutely delighted" by the agreement.

Reid, who said the project was "crucial" for both countries, made the announcement after meeting his French counterpart Michele Alliot-Marie at the ministry of defence.

Alliot-Marie, who was earlier given a ceremonial guard of honour "to highlight the close defence ties between the UK and France", hailed the agreement as an "essential symbolic advance for Europe".

Britain and France are working on building two and one new conventionally-powered carriers respectively and want to share the costs of their technical development.

Negotiations stumbled over British demands that France pay 100 million pounds (145 million euro, 179 million dollar) for access to its expertise.

France accepted Tuesday to make an immediate 30 million pound payment and an additional 25 million pounds in July. They will pay another 45 million pounds by the end of 2006 if they want to continue, the ministers said.

"The problem is not deciding whether or not to build a second aircraft carrier," Alliot-Marie stressed. "France needs this aircraft carrier. The problem is ensuring whether there are enough technical similarities to continue together."

One reason French President Jacques Chirac opted at the start of 2005 for a conventionally-powered carrier, and not a nuclear-powered ship like France's new Charles de Gaulle carrier, was the chance to share part of the investment with Britain.

Tuesday's announcement -- expected since last June -- follows "months of work", according to Alliot-Marie, and lifts some of the burden of uncertainty from the French project.

Where the three new vessels will be built has not yet been decided, the ministers said.

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