The deal has split Romania's fractured centrist government coalition. The ill-equipped army says it needs the helicopters to balance rearmament by neighbours, but key ministers and parliamentarians say the stretched economy can ill afford them.

Local media printed a letter which prime minister RaduVasile sent to US president Bill Clinton last month, asking for a supply of 60 Cobra attack helicopters from the US army reserves.

This was to be a cheaper alternative to the project with Textron Inc's Bell Helicopters for 96 aircraft.

"That letter was an alternative, not a counter-offer to the Bell contract," Vasile told reporters during Romanian Navy Day ceremonies in the Black Sea Port of Mangalia on Saturday.

In mid-July, the government gave its approval for the deal, under which the army'sprocurement agency would raise $1.5 billion endorsed by state guarantees.

But prospects for helicopter procurement, whose financing is criticised by key economic ministers, are confused. Parliament has yet to clear the deal -- Romania's biggest post-communist project -- after it returns from summer recess in September.

former Prime minister Petre Roman, now chairman of the upper house of parliament, played down conflicting stands over the deal held by two ministers fielded by his Social Democrats, the coalition's second largest party.

Roman called a dispute which erupted last week between the defence and industry ministers "a very useful debate".

"A decision on the (Bell) contract should be taken by the country's Supreme Defence Council," he said, in a reference to a body chaired by president Emil Constantinescu.

Under the deal, Bell Helicopters would pay $150 million for a majority stake in a local plant and would co-produce 96 attack helicopters, derived from the AH-1W Supercobra used by the USMarine Corps, for the Romanian army.

Last week, several top parliamentarians backed finance minister Daniel Daianu's stand against signing the guarantees for the deal.

The International Monetary Fund has expressed misgivings about the helicopter programme, saying that high-spending projects would jeopardise efforts to keep the budget and current account deficits under control.

The influential Romanian Orthodox Church has also stepped into the row, with a senior cleric blasting the helicopter deal during Assumption Day religious ceremonies.

"There's been talk we should buy attack helicopters...But as far as we're concerned, we should live within our means," Orthodox Archbishop Pimen told a congregation at a monastery on the northeast border with ex-Soviet Moldova and Ukraine.