President Emmanuel Macron attends a meeting. File photo

America’s oldest ally, France on Friday recalled its ambassadors to the United States and Australia in a ferocious row over the scrapping of a submarine contract that dwarfed decades of previous rifts.

An unprecedented step that revealed the extent of French anger against its allies as the relationship conceived in 18th century revolutions appeared at a tipping point after the US, Australia and Britain shunned France in creating a new Indo-Pacific security arrangement.

President Emmanuel Macron recalled the envoys after Canberra ditched a deal to buy French submarines in favour of US vessels, Foreign Minister Jean-Yves Le Drian said.

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Le Drian said that the decision was made to "immediately" recall the two French ambassadors due to "the exceptional seriousness of the announcements made on September 15 by Australia and the United States".

It was the first time ever France has recalled its ambassador to the US, according to the French foreign ministry. Paris also recalled its envoy to Australia.

French Foreign Minister Jean-Yves Le Drian arrives for a meeting. File/AP

The decision to recall the ambassador represents a shocking turnaround for France under Macron, who — after an increasingly bitter relationship with former President Donald Trump — warmly clasped hands with Biden at a G-7 summit in June and confirmed that "America is back.”

Macron has not yet commented on the issue. The recall is his boldest foreign policy move yet in a four-year presidency in which he has sought to strengthen France’s diplomatic footprint and role in European policy-making, and to rally France’s neighbors around his vision for a Europe less dependent on the U.S. military umbrella.

The abandonment of the ocean-class submarine project that Australia and France had been working on since 2016 constituted "unacceptable behaviour among allies and partners," the minister said.

"Their consequences affect the very concept we have of our alliances, our partnerships, and the importance of the Indo-Pacific for Europe," he added.

US President Joe Biden announced the new Australia-US-Britain defence alliance on Wednesday, extending US nuclear submarine technology to Australia as well as cyber defence, applied artificial intelligence and undersea capabilities.

The pact is widely seen as aimed at countering the rise of China.