From the Telegraph:  [Former U.S. Director of National Intelligence Dennis] Blair proposed an unprecedented written pledge even more binding than the post-war "gentlemen’s agreement" between the US, Britain, Canada, Australia and New Zealand as trusted partners who do not spy on each other. The deal would also have given France access to a highly secure intelligence retrieval and exchange system.

But the proposed pact was ruled out by Mr Obama as too risky. …

Mr Sarkozy’s chief Elysée adviser confirmed that the deal had been in the offing.

Claude Guéant said: "It was a new and interesting prospect, a sort of conclusive new step in relations."

The deal was discussed between Mr Blair and Bernard Bajolet, France’s new intelligence chief, but then dropped, he said. But Mr Guéant played down Mr Sarkozy’s reaction.

"I don’t think [the president] took it with a sense of disillusion," said a diplomatic source. "We’ve lived without it for decades. We were not the askers. It changes nothing in our relationship," he said.

French officials put the aborted pact down to internal turf wars within the US intelligence community.  (photo: Getty)

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