Prime Minister Scott Morrison says Australia will “happily work with France on projects of mutual interest” but it may take a while for tensions to subside.

At the conclusion of the G20 summit in Rome on Sunday French President Emmanuel Macron was asked by Australian journalists whether Mr Morrison had lied to him when cancelling the Naval Group’s submarines contract.

“I don’t think, I know,” Mr Macron said.

The Prime Minister told reporters he had absolutely no idea why Mr Macron had called him a liar.

“I think it’s clear from President Macron’s statements yesterday that the level of offence was very great and we will wait for that to subside,” Mr Morrison said.

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