Amid reports of Gorshkov deal entering into rough weather, Defence Minister A K Antony on Saturday said the government was trying to settle the issue of acquisition of the Russian aircraft carrier with the highest level in Moscow [Images].

"There are some problems. We are trying to settle that at the highest level of the Russia [Images]n government," he told press persons in Gangtok when asked about reports that Russia was demanding more money.

Though the defence minister did not clarify the nature of the problem, cost escalation is one of the major hiccups facing the deal.

The $7,000 crore ($1.5 billion) deal was signed in January, 2004.

However, there were reports that Moscow was demanding more than a $100 million extra and one more year to complete the project.

The carrier christened Vikramditya by the Indian Navy was originally to be delivered by 2008, but the navy is worried about reports that the delivery date may be extended.

The original $1.5 billion contract involved radical retrofitting of the Kiev class carrier and arming it with Mig-29 K Fulcrum and Mig-29KUB fighters and KA-27 and Helix KA29 and 31 anti-submarine helicopters.

The existing carrier INS Virat will retire in 2012 and the navy requires almost a year to integrate the ship in the fleet after the delivery.