The high-profile Public Accounts Committee said over 200 million ringgit (52.6 million dollars) was needed to meet unpaid bills and project costs run up by PSC Naval Dockyard and recommended the government rescue the project.

"It is a comment that we must look into very seriously and decide what is the best action that can be taken in the interest of the government and the ministry," Abdullah was quoted as saying by the official Bernama news agency.

He added that "appropriate action" would be taken, but did not elaborate.

PSC Naval Dockyard signed a 24.3 billion ringgit (6.4 billion dollar) contract in 1998 to build the heavily-armed offshore patrol vessels (OPV) over a 10-year period. It was due to deliver the first two last year.

But the handover of the boats, built with foreign partners led by Germany's ThyssenKrupp AG, was postponed after numerous technical problems during sea trials.

The chair of the Public Accounts Committee Shahrir Abdul Samad blamed the failures on weak management and greed.

The committee has "made a conclusion that PSC-Naval Dockyard has failed the government," he was quoted as saying by the Star newspaper.

Shahrir said the company owed contractors, vendors and suppliers 80 million ringgit, and an additional 200 million ringgit was needed to complete the building of the two vessels.

He also called on the government to investigate senior company officials for possible criminal breach of trust, reported the New Straits Times.

The situation "shows that the privatisation failed. It is time for the government to step in and de-privatise the dockyard to revive confidence by all concerned parties," he was quoted as saying by the newspaper.