Lufthansa cargo planes will be allowed to fly over Russia until February 2008 in a temporary solution to a dispute that forced them to avoid the country`s airspace, German Transport Minister Wolfgang Tiefensee announced on Friday.

The minister said after talks with his Russian counterpart, Igor Levitin, that Lufthansa would continue to use a refuelling and freight distribution centre in the Kazakh capital, Astana, until the end of February.

The Russian transport ministry however denied it had given the green light for the three-month extension.

"We cannot confirm this agreement. We received the letter from our German colleagues which we will examine and we will give our response next week," a ministry spokesman said.

Russia withdrew overflight rights for Lufthansa`s freight division on October 28, saying a temporary agreement permitting the cargo flights to use Russian airspace to reach Central Asia had elapsed.

But the move was widely seen as a Russian bid to persuade Lufthansa to use an airport in Krasnoyarsk, Siberia, on Russian territory.

Russia last week restored the overflight rights until November 15 pending a new deal.

Tiefensee confirmed that negotiations on a permanent move to Siberia would take place this year.

"Official negotiations between the German and Russian transport ministers about a possible move of Lufthansa Cargo to Krasnoyarsk are expected to take place in December," the minister said in a statement.

A Lufthansa spokesman, Michael Goentgens, said the company was waiting "for politicians to bring clarity to this matter."

Lufthansa, which is privately run, has already said it is not prepared to move its hub to Siberia because the Krasnoyarsk airport lacks infrastructure and is subject to severe weather conditions.

The airline said that skirting around Russian airspace cost it 400,000 dollars (272,000 euros) a week in extra fuel.
sections: Economics, World News