Australian navy sinks hopes for lost WWI submarine

CANBERRA, May 30 (Reuters) Australian navy's hopes of finding a World War I submarine suffered a setback today after a remote camera revealed that an underwater object found in Pacific waters in February was a large submarine-shaped rock.

Sailors on a navy ship searching near Rabaul, on the Papua New Guinea island of New Britain, had hoped they had found the AE1, Australia's first submarine, which disappeared in September 1914 with the loss of all 35 crew.

But junior Defence Minister Bruce Billson said a further investigation, using underwater cameras, divers and a remotely operated vehicle (ROV), proved the object discovered in February was not the long lost submarine.

''The object detected ... was confirmed by the ROV camera to be a submarine shaped rock formation,'' Billson said in a statement today.

The loss of the AE1 has been one of the country's enduring mysteries.

It was first major loss of Australian life in World War One, and followed the country's first military action of the conflict when troops captured a German Pacific radio base at Rabaul.

A brief search in 1914 found no trace of the vessel, while reconstructions of German fleet movements indicate it was unlikely the submarine was attacked.

The AE1 and its sister, the AE2, were bought from Britain and arrived in Australia in May 1914. Both were commanded by British officers with a mix of British and Australian crew.

The AE2 was also lost during World World War One. It sank in April 1915 in Turkey's Sea of Marmara during the Gallipoli campaign.

Unlike the AE1, its crew all survived.

Australian submarine hunters found the wreck of the AE2 in 1998.

REUTERS SKB ND1036