Austria is in talks to sell 40 second-hand Leopard 2A4 tanks back to their German manufacturer after Vienna balked at the Canadian military buying them, a press report said Monday.

Austrian defence ministry spokesman Michael Bauer confirmed only that talks with the firm, Krauss-Maffei Wegmann, were "going well, although nothing has been signed yet."

The Austrian daily Kronen-Zeitung said that the Canadian military had also expressed interest in buying the 15-year-old tanks, which Krauss-Maffei will buy back for 400,000 euros ($532,300, CAN$545,280) each and then modernise.

"But that would have meant so much red tape, since the Canadians are fighting in Afghanistan, meaning that the sale would not have been approved," the paper cited an unnamed army insider as saying.

This created consternation among some partners in the NATO military alliance, although "as luck would have it" Canada decided it was no longer interested, the daily added.

The paper said Austria bought the tanks for 1.3 million euros each in 1996.