Panama denied a claim made by the State Department on Wednesday that the Central American nation had agreed to no longer charge fees for US government ships to transit the country’s famous canal.

Panama's president says the State Department's claim of an agreement granting U.S. warships free canal passage was "based on a falsity. And that's intolerable."

US government ships will no longer pay to transit through the Panama Canal, the US Department of State said on Wednesday, following fierce criticism from Washington over the administration of the waterway.