Germany, the second largest contributor of aid to war-torn Ukraine, plans to halve its bilateral military aid to Kyiv in 2025, a parliamentary source told AFP on Saturday.

Instead, the government of Chancellor Olaf Scholz will bank on money generated by frozen Russian assets to continue supporting Kyiv and is not planning any "additional aid" to the four billion euros ($4.4 billion) set aside in next year's budget.

This year aid from Berlin amounted to eight billion euros.

To compensate, Germany is counting on "the creation, within the framework of the G7 and the European Union, of a financial instrument using frozen Russian assets", said a separate source from inside the finance ministry.

The sources were confirming separate press reports, with the newspaper Frankfurter Allgemeine Sonntagszeitung saying in its weekend edition that the move was part of an agreement between the chancellor, of the center-left Social Democratic party, and the liberal Finance Minister Christian Lindner.

The 2025 budget has been the subject of fierce discussions between the government coalition of the liberal FDP party, the Greens, and the Social Democrats.

The finance minister has asked his counterparts to make savings to respect a constitutional rule that aims to prevent the state from taking on too much debt.

However, the budget is still subject to discussion before being adopted by the end of the year.

Ukraine's allies have been working on a mechanism to allow part of the $300 billion of Russian assets frozen worldwide to be used to support Kyiv in its war with Moscow.