France plunged into an unprecedented diplomatic crisis with the United States and Australia on Friday after it recalled its ambassadors from both countries over a trilateral security deal, which sank a French-designed submarine contract with Canberra.

The rare decision taken by French President Emmanuel Macron was made due to the “exceptional gravity” of the matter, foreign minister Jean-Yves Le Drian said in a statement.

On Thursday, Australia said it would scrap a $40-billion deal signed in 2016 for France’s Naval Group to build a fleet of conventional submarines and would instead build at least eight nuclear-powered submarines with US and British technology after striking a trilateral security partnership.

France called it a stab in the back.

A diplomatic source in France said it was the first time Paris had recalled its own ambassadors in this way.

Australia said on Saturday morning it regretted the recall, and that it valued the relationship with France and would keep engaging with Paris on other issues.

“Australia understands France’s deep disappointment with our decision, which was taken in accordance with our clear and communicated national security interests,” a spokesperson for foreign affairs minister Marise Payne said in a statement.

US state department spokesperson Ned Price said France was a “vital ally” and that the US would be engaged in coming days to resolve the differences.

The French foreign ministry statement made no mention of Britain, but the diplomatic source said France considered Britain had joined the deal in an opportunistic manner.

“We don’t need to hold consultations with our (British) ambassador to know what to make of it or to draw any conclusions,” the source added.

Le Drian said the deal was unacceptable. “The cancellation (of the project) ... and the announcement of a new partnership with the United States meant to launch studies on a possible future cooperation on nuclear-powered submarines, constitute unacceptable behaviour between allies and partners,” he said in a statement.

He added that the consequences “directly affect the vision we have of our alliances, of our partnerships and of the importance of the Indo-Pacific for Europe”.

Australian Prime Minister Scott Morrison on Friday rejected French criticism that it had not been warned about the new deal, and said he had raised the possibility in talks with the French President that Australia might scrap the Naval Group deal.

Morrison insisted he had told Macron in June that Australia had revised its thinking.

“I made it very clear, we had a lengthy dinner there in Paris, about our very significant concerns about the capabilities of conventional submarines to deal with the new strategic environment we’re faced with,” he told 5aa Radio.

The strain in multilateral ties come as the US and its allies seek additional support in Asia and the Pacific given the concern about the rising influence of a more assertive China.

US secretary of state Antony Blinken tried on Thursday to calm the French outcry, calling France a vital partner in the region.

Pierre Morcos, a visiting fellow at Washington’s Centre for Strategic and International Studies, called France’s move “historic”. “Reassuring words such as those heard yesterday from secretary Blinken are not enough for Paris — especially after French authorities learned that this agreement was months in the making,” he said. Reuters