Australia's Prime Minister Scott Morrison has hit back at French President Emmanuel Macron's accusation that he lied over the cancellation of a submarine building contract, worth $40 billion.

The AUKUS, a new security alliance between the UK, U.S., and Australia, will give Canberra access to nuclear-powered submarines. Paris was blindsided by the arrangement, because it usurped a pre-existing deal it had to supply diesel-powered subs to the Antipodean nation.

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On Sunday Macron was asked by an Australian reporter at the G20 in Rome whether he thought Morrison had "lied" to him about the progress of the contract earlier in the year.

"I don't think, I know," Macron responded. Adding: "I think it's a very bad news for the credibility of Australia and very bad news for trust."

In Glasgow for the COP26 summit, Morrison responded: "I don't wish to personalize this. There's no element of that from my perspective. I must say that I think the statements that were made questioning Australia's integrity ... I'm not going to cop sledging at Australia. I'm not going to cop that on behalf of Australians. I can deal with whatever people throw at me. But Australia has a proud record when it comes to our defense capability."

He also told reporters the French submarines were not what Australia needed: "The contract had had its difficulties that had led to me enquiring into potential other options, for Australia's sake."

In his remarks on Sunday, Macron also told the Australian reporter: "I have a lot of respect for your country, I have a lot of respect and a lot of friendship for your people. I just say when we have respect, you have to be true and you have to behave in line and consistently with this value."