MADRID (REUTERS) - The Panama Canal Authority has broken off talks with a Spanish-led building consortium over US$1.6 billion (S$2 billion) in cost overruns during work to expand the Panama Canal, the consortium said on Wednesday.

Consortium GUPC, led by Sacyr, said the breakdown in talks puts the Panama Canal expansion and up to 10,000 jobs at immediate risk, and that it was still continuing to seek a solution.

Shares in Sacyr fell by 7 per cent, while consortium partner Salini Impregilo were down by 2.6 per cent.