Renault Trucks Defense said Wednesday its project to develop an armoured infantry fighting vehicle together with a Russian manufacturer is on hold due to the Ukraine crisis.

"The project is on hold because of the political situation, but that is not saying it has been halted," RTD marketing director Marc Chassilian told journalists in Paris.

The project to develop the wheeled combat vehicle named Atom with Russia's state-owned Uralvagonzavod (UVZ) is at risk due to its use of a Volvo motor, the Swedish daily Dagens Industri said Wednesday.

RTD is owned by Swedish truck manufacturer Volvo AB, and the use of the Volvo motor requires Swedish government approval.

The newspaper wrote that there is a risk the government would now veto the deal as "its policy is clear: Swedish companies shouldn't furnish the Russian military or defence industry with military equipment that risks being used against Swedish troops."

Sweden is not part of NATO, whose members including France have yet to block weapons sales to Moscow over its annexation last month of the Crimea from Ukraine. NATO members have suspended military cooperation with Russia, however.

RTD and UVZ signed in February 2013 at the Idex arms show in Abu Dhabi what the Russian company calls a cooperation agreement to jointly develop the Atos.

Neither company has provided any details.

Last September a mock-up of the Atom was shown at a Russian arms fair, according to several specialist publications.

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