The German-built KRI Nanggala 402 had been scheduled to do live torpedo exercises when it asked for permission to dive early Wednesday morning, authorities said.

"After permission was given according to the procedure, the submarine lost contact and could not be reached," the defence ministry said.

A helicopter looking for the missing vessel spotted an oil spill in waters where the submarine was thought to have submerged, it added.

The navy dispatched warships off the northern coast of the holiday island to search for it, while neighbours Singapore and Australia as well as India had been asked for help.

The navy sent out an international distress signal, and "several countries have responded and are ready to help including Singapore, Australia and India," the ministry said.

There were 53 crew aboard the vessel, which was believed to be in waters about 700 metres (2,300 feet) deep.

The 1,300-tonne KRI Nanggala 402 was built in 1978, according to a government website.

Indonesia, which has been moving to upgrade its military equipment in recent years, has five German and South Korean-built submarines in its fleet.