They say Turkey will be given only a $823,000 grant for consultancy services.

"The US Eximbank (Export-Import Bank), TDA (Trade and Development Agency and OPIC (Overseas Private Investment Corporation) will provide a $827 million loan to finance the project," Turkey's economy minister Isin Celebi said earlier after a meeting with a senior US foreign ministry official.

But officials from the US delegation told Reuters there had been a misunderstanding, and that the amount would be $823,000 in rent, not credit, for consultancy services to be provided by the US TDA.

The officials also said that US Eximbank and OPIC would support the Baku-Ceyhan pipeline if it is approved.

Turkey has campaigned for the pipeline arguing that its narrow Bosphorus and Dardanelles straits cannot support theadditional tanker traffic.

Under a Russia-backed alternative plan, Azeri crude will be pumped to the Russian port of Novorossisk through a pipeline.

An international $8-billion consortium led by British Petroleum (BP) and Statoil began oil production in Caspian off-shore fields late last year. Their main output will come on steam at 800,000 barrels per day (40 million tonnes a year) by 2010.

The Azeri International Operation Company (AIOC) consortium is to decide later this month the route for its main oil exports.