The French and German partners involved in a consortium developing future search technologies, Quaero, went their separate ways because of differences over technology, according to senior officials at the French agency funding the research.

The German Federal Ministry of Economics and Technology said on Monday that Germany has pulled out of the Quaero consortium and will set up its own research project, Theseus.

Jean-Louis Beffa, chairman of the executive board of the French Agency for Industrial Innovation (AII), said the consortium ran into a problem with technology, and must now reshape the project.

Thomson SA, the French company leading the Quaero project, wanted to concentrate on managing multimedia resources, while the leading German partner, Empolis GmbH, is focused on knowledge management, said Robert Havas, director of AII. These differing research interests led the companies to conclude that their research would be better conducted as two separate projects, he said.

"The two projects, on the French side and the German side, are not the same," said Thomson spokeswoman Julie Dardelet.

Empolis, a subsidiary of Bertelsmann AG, will lead Germany's Theseus group, working with SAP AG, Siemens AG and other German companies; the German National Library, and a handful of publicly funded laboratories including groups at the universities of Karlsruhe, Munich and Dresden.

Karlsruhe University was originally part of the Quaero consortium. Siemens had been expected to join the French consortium too, to replace Deutsche Telekom AG, which dropped out at the start of the year.

AII is still prepared to fund work in the German public laboratories, if it is necessary to the French project, Beffa said.

Over the next five years, the agency plans to invest €115 million ($152 million) in the Quaero project, out of a total budget of €186 million. Before handing over the money, the agency is awaiting approval from the European Commission's Competition Directorate, a standard procedure in handing state aid to European businesses.

Approval for the government funding from the Commission could come in the first quarter of 2007, said Thomson's Dardelet. The consortium members are moving ahead with research meanwhile, she said.

Although France and Germany failed to agree on a focus for their work on search technologies, "cooperation between France and Germany is working well" in other research areas, Havas said.