Australia navy to buy A$11 bln warship fleet

CANBERRA, June 20 (Reuters) - Australia will build a new fleet of advanced Spanish-designed destroyers and amphibious assault ships at a cost of A$11 billion (9 billion dollars), Prime Minister John Howard said today.

Howard said his government had agreed to buy three F100 air warfare destroyers at a cost of more than A$7 billion, to be built in Adelaide by Australian firm ASC, US contractor Raytheon and Spanish government-owned Navantia.

The 6,000-tonne warships will be equipped with advanced US radars and may one day carry SM 3 missiles as part of US and Japanese efforts to build a ballistic missile defence shield in Asia to guard against threats from rogue nations.

Two 27,000-tonne amphibious warships, also Navantia designs, would be built in Victoria state in partnership with Australian defence firm Tenix, with the first to enter service with the Royal Australian Navy by 2012, Howard said.

The purchases would transform Australia's navy into one of the most powerful in the Asia region, with the two amphibious carriers able to carry more than 2,000 troops, 16 attack and transport helicopters and up to 23 tanks.

''The will greatly enhance Australia's ability to send forces in strength when required, particularly in our own region, but not restricted to our own region,'' Howard told a briefing.

The Navantia destroyer designs beat a larger and more costly rival US design, while the amphibious warships were preferred over a smaller French design.

Australia has in recent years increased defence spending above A$20 billion a year amid growing instability in the Asia-Pacific, with a A$50 billion military buy-up already underway including advanced F-35 Joint Strike Fighters.

Canberra, a close US ally, has around 1,500 troops in and around Iraq as part of the US-led coalition, as well as a special forces task group in Afghanistan.

Australian troops are also taking part in security operations in East Timor, having been deployed to the country last year following an outbreak of ethnic bloodletting.

($1=A$1.18) REUTERS KN SBA BST0540