Wednesday, Howard officially announced his choice of a Spanish destroyer design for three warships in a deal worth nearly $8 billion overall. He said the Australian navy also was to be fitted with two Spanish-designed landing ships at a total cost of nearly $2 billion.

"They will greatly enhance Australia's ability to send forces in strength when required, particularly in our own region but not, of course, restricted to our region," he said in a report by The Australian.

The American company Gibbs and Cox had run hard for the destroyer design contract. The chief of the Royal Australian Navy had himself lobbied for the U.S. vessel design -- based on the U.S. Arleigh Burke class of destroyer -- but Howard took the recommendation of a government defense panel for the less expensive but fully developed Spanish design.

Most of the building of the ships to Australia's specifications will take place in Adelaide, creating an estimated 3,600 jobs.

The destroyers are part of a military modernization plan by the Howard government, which has become increasingly concerned over China's military buildup and the possible threat posed by North Korea's missile development programs.

It recently announced increased cooperation with the United States and Japan in helping establish a regional anti-ballistic missile defense system.

The destroyers will be outfitted with the U.S.-made Aegis system, an advanced multiple radar tracking, fire and command anti-missile and anti-aircraft unit. The ships will initially carry SM-2 missiles, but could later be equipped with the more advanced SM-3.

The U.S. firm Raytheon will be the electronic warfare system integrator for the destroyer project and will have 140 people in Adelaide working on it.