COLOMBO. Sept 8: Srl Lanka s new socialist government. which has been reexamining commercial deals by the previous regime. Thursday approved a 14 billion rupee (291 million dollars) contract with Airbus Industries of France, reports AP.

The deal to buy three aircraft for the state-owned Air Lanka was suspended last month after Prime Minister Chandrika Kumaratunga’s government decided to probe charges of financial mismanagement and corruption against the United National Party government, which was ousted after 17 years in power.

The government has also suspended a 72 million dollar deal with a Russian company for the supply of armoured personnel carriers.

Sri Lanka's credibility would have dropped if the agreement signed by the previous regime was cancelled. Senanayake said.