India Cancels AgustaWestland Helicopter Deal: Source

India has cancelled its scandal-hit $770 million helicopter deal with AgustaWestland, part of Italian defense group Finmeccanica (SIFI.

MI), a senior defense ministry official told Reuters on Wednesday.

India froze payments for the 12 AW101 helicopters after Finmeccanica's then chief executive was arrested in February for allegedly paying bribes to secure the deal, embarrassing the government before parliamentary elections due by May.

India's Defense Minister A.
K.
Anthony has said he did not believe AgustaWestland's denial that it paid bribes to swing the deal.

AgustaWestland denies any wrongdoing.
Finmeccanica spokesman Roberto Alatri in Italy declined to comment on the scrapping of the deal.

India's defense ministry, which is expected to issue a statement on Wednesday, was not immediately available for comment.

Italy's Defense Ministry declined to comment.
United Technologies Corp's (UTX.
N) Sikorsky Aircraft, EADS' EAD.
PA Eurocopter and Lockheed Martin (LMT.
N) may now be in line to provide helicopters for the country's defense forces.

REUTERS