“The cost escalation would have placed an unaffordable burden on the taxpayer at a time when the national fiscus is under pressure due to the economic downturn,” government spokesman Themba Maseko said in a statement.

“Cabinet believes that the interests of the South African taxpayer will be best served by not proceeding with the contract,” Maseko added.

The contract was agreed five years ago when the government said the cost of the planes would be around 830 million euros (1.2 billion dollars). At the time, that amounted to 6.4 billion rand.