The Vietnamese government has pulled out of a deal with Belgium over the manufacture of a Belgian-made satellite, La Libre Belgique reported on Wednesday.

Vietnam and Belgium originally agreed to the contract in January 2014.

The satellite, VNREDSat1b, was to be manufactured by an industrial consortium led by the Liège-based Spacebel company, and including Walloon and Flemish companies, who were to deliver the satellite for 60 million euros.

The contract was withdrawn after prolonged negotiations over its terms broke down.

"The VNREDSat1b project could not progress as hoped because of negotiations that have prolonged, and that affected its implementation and effectiveness," Vietnamese Prime Minister Nguyen Tan Dung told his Belgian counterpart, Charles Michel, local media reported.

The VNREDSat1b satellite was to be placed in orbit for a five-year observation mission. It was designed to enable Vietnam to strengthen its ability to monitor natural phenomena such as deforestation and river and sea pollution.