Russia reportedly wants almost 1.2 billion euros in compensation, if France cancels a contract to deliver two Mistral helicopter carriers.
President Francois Hollande is under pressure from Western allies to scrap the deal because of Moscow’s role in the Ukraine crisis.
According to the Russian daily, Kommersant, Paris is offering around 785 million euros.
The Kremlin says its position is clear: either France stumps up the full compensation, or it hands over the warships.
It is claimed that Paris is keen to resell the two Mistrals before paying out compensation.
But a Russian defence official has said the vessels cannot go to a third country because they’ve been tailor made and it is a matter of state security.
While it seems a storm is brewing at sea, the Kremlin has emphasised there is no threat to relations with France.