Turkey's Prime Minister Ahmet Davutoglu stands at the mausoleum to remember the nation’s founding father Mustafa Kemal Ataturk on the 77th anniversary of his death, in Ankara, Turkey, Tuesday, Nov. 10, 2015 (Photo: AP)
Turkey has cancelled a multi-billion-dollar deal with China to build its first anti-missile system that had alarmed Ankara's allies in NATO, a Turkish official said on Sunday.
"The deal was cancelled," the official from Prime Minister Ahmet Davutoglu's office told AFP.
"One of the main reasons is that we will launch our own national missile project," added the official.
The news came as Turkey hosted key Western allies including US President Barack Obama but also Chinese leader Xi Jinping for the summit of G20 top economies in the Mediterranean resort of Antalya.
Turkey entered negotiations in 2013 with the China Precision Machinery Export-Import Corporation (CPMIEC) to finalise a contract worth $3.4 billion (3 billion euros).
French-Italian consortium Eurosam and US-listed Raytheon Co had also submitted offers but the government had prioritised talks with the Chinese company, which raised serious concerns over the compatibility of CPMIEC's systems with NATO missile defences.
NATO has said missile systems within the alliance must be compatible with each other while calling on Turkey to take this factor into account.
Turkish government sources said an official announcement was expected next week.