"There is currently no reason to think about withdrawing from the project," to build some 200 tanks, a German defense ministry spokesman said.

He said he was aware that Britain was reexamining its involvement with the 300 million euro (345 million dollar) program to develop a tank, but that the German government would not decide whether to buy any before the end of the development phase in 2004.

The German weekly newsmagazine Der Spiegel reports in its forthcoming Monday issue that Britain has pulled out of the GTX tank project, following its recognition during the recent Iraqi war that it needs more light and swift armored vehicles in its armory rather than a heavy tank.

The magazine said the British decision effectively killed off the entire project.

Germany, Britain and the Netherlands agreed two years ago to push ahead with a project to jointly develop the tank, nicknamed the Boxer, despite the withdrawal of France.

The three countries placed a option on the purchase of 200 tanks from German defence groups Krauss-Maffei Wegmann and Rheinmetall, charged with constructing 3,500 tanks at a cost of 1.5 million euros (1.73 million dollars) per vehicle.

The newsmagazine said that Britain would no longer buy any of the tanks, but would continue to fund the development phase of the project.

The GTX is due to replace the German military's old M113 and Fuchs tanks.

WAR.WIRE