France's President Emmanuel Macron on Sunday accused Australia's prime minister of lying to him before backing out of a submarine contract with Paris in September.

"I don't think, I know [Scott Morrison lied]," he said while speaking to Australian journalists during the G20 meeting in Rome. 

"I think it's a very bad news for the credibility of Australia and very bad news for trust," he added.

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Canberra backed out of a multi-billion-dollar deal with Naval Group, a majority French-owned company, to construct 12 diesel-electric submarines in favor of another pact with the UK and U.S. for eight nuclear-powered submarines built with U.S. technology.

Paris called the incident a "stab in the back" and withdrew its ambassadors from Washington and Canberra, although they have since returned.

On Monday, Morrison denied he had lied to Macron and that their previous deal did not meet his country's needs. He added that the process of repairing ties between Paris and Canberra has begun.

Australia's Deputy Prime Minister Barnaby Joyce urged Paris to put the cancellation of the deal in perspective.

"We didn't steal an island. We didn't deface the Eiffel Tower. It was a contract," he said in Sydney.

"Contracts have terms and conditions. And one of those terms and conditions and propositions is that you might get out of the contract."

He spoke hours before Australia's Foreign Minister Marise Payne met with France's ambassador for an hour-long meeting about repairing the countries' relationship.

Since the original incident, the relationship between France and the U.S. has seemingly been on a better footing.

On Friday, U.S. President Joe Biden told Macron that his country had been "clumsy" in negotiating the deal with Australia and "we have no better ally than France."