Libya is set to buy anti-tank missiles and radio systems from European aerospace and defense group EADS, days after a visit to Tripoli by President Nicolas Sarkozy, the French government said on Friday.

France repeated its denials that the sale had been agreed in exchange for the release of a group of foreign medics held in jail for eight years for allegedly infecting Libyan children with HIV, and freed hours before Sarkozy's visit.

Defence Minister Herve Morin said the groundwork had been laid under the previous French government which approved the sale of anti-tank missiles in February, before Sarkozy's victory in the May presidential election.

Agreement has been granted in principle, so unless there is a technical disagreement of some kind, it will be done at any time now, he told France Info radio.

EADS said its MBDA joint venture with Britain's BAE Systems and Italy's Finmeccanica had finalized an accord to sell Libya Milan missiles, a portable, medium-range anti-tank weapon. It was also in advanced talks on supplying radios.

This (missile) contract is awaiting the signature of the Libyan client, and EADS is happy that the negotiations could be concluded, EADS said in a statement.

The company made no comment on the value of the deals. A Libyan source said earlier they were worth a total of 296 million euros ($402 million).

COMMISSION OF INQUIRY

Sarkozy clinched an accord on defense and signed a memorandum of understanding for a nuclear energy deal during his visit to Tripoli.

The opposition Socialists called for a parliamentary commission of inquiry to establish whether the missiles sale was linked to the release of the medics.

There's a further question, which doesn't have to do with a commission of inquiry, which is, should we have arms deals with a country like Libya, ruled by (Muammar) Gaddafi? Socialist party leader Francois Hollande told France Inter radio.

Morin said criticism from the Socialists was intended to discredit Sarkozy's part in securing the release of the medics after a mission to Tripoli by his wife Cecilia.

We're seeing a sort of systematic procedure to demolish a real French diplomatic success, he said.

Libya started emerging from international isolation in 2003 when it agreed to halt a weapons program prohibited by the United Nations and pay compensation for the bombing of a U.S. airliner over Scotland in 1988 in which 270 people were killed.

The European Union lifted an arms embargo on Libya in October 2004 but Gaddafi's son, Saif al-Islam, has said the ban has effectively remained in place.

Sarkozy's spokesman David Martinon denied any deal had been offered in exchange for the release of the medics but told French radio Sarkozy's visit had improved the climate between the two countries and may have helped the deal with EADS.

It's true that President Sarkozy's state visit to Tripoli was very successful because the negotiations for freeing the nurses had gone through just before and it seems that greatly accelerated things to the benefit of French companies, he said.

(Additional reporting by Nick Antonovics)

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