New Delhi: Government sources on Thursday dismissed as "factually incorrect" media reports of former Hindustan Aeronautics Limited (HAL) chief T.S. Raju claiming that the defence undertaking had signed a work-share contract with French company Dassault Aviation -- the manufacturer of Rafale fighter jets.

"In the news item published (Thursday) ex Chairman and Managing Director, (CMD) HAL has been quoted as stating that an agreed work-share with Dassault Aviation was submitted to government. The same news item also referred to the cost of the aircraft, life cycle cost issues, etc. The statement attributed to ex CMD, HAL is factually incorrect," said the sources.

The sources said that Raju was a member of the Contract Negotiations Committee of the Ministry of Defence (MOD) and "there were many major areas of disagreement between HAL and Dassault ".

They said that the HAL, in a letter on Oct 10, 2012 to the MOD, "brought out these disagreements pertaining to the work-share between them".

"Subsequently in July 2014, HAL in its letter to MOD has also highlighted one major unresolved issue regarding responsibility sharing between Dassault and HAL for licence manufacture of the aircraft.

"Further, the man hours required for manufacture of various components of the aircraft in HAL was also a point of disagreement between Dassault and HAL. There is, therefore, a contradiction in the claims attributed to Raju," they said.

The sources also said that the since the work-share between Dassault and HAL was "never agreed upon", the statement claiming lower life cycle cost is "completely presumptive".

They said that because of these reasons, the proposal for 126 Medium Multi-Role Combat Aircraft (MMRCA) could not be progressed further.

In an interview to a national daily, Raju who retired from the HAL on Sep 1, asserted that HAL "could have built Rafale fighters in India had the government managed to close the original negotiations with Dassault".

Riding on Raju's statements, the Congress led by its president Rahul Gandhi demanded Defence Minister Nirmala Sitharaman's resignation accusing her of "lying".

The party claimed that Raju's remarks "nailed Sitharaman's lie" that HAL didn't have the capability to build the Rafale.