The US$68 billion agreement with Naval Group to build 12 state-of-the-art Attack Class subs is years behind schedule, well over budget and tangled up in Australian domestic politics.

The question of whether the project will go ahead is likely to be a hot topic of discussion when Prime Minister Scott Morrison meets French President Emmanuel Macron next week in Paris.

"It is prudent that Defence is looking at alternatives if we were unable to proceed," said Greg Moriarty, the top civil servant in charge of Australia's Department of Defence.

"The department is doing prudent contingency planning," he said, adding the government was "absolutely committed" to working through problems with Naval Group.

Australian officials say work on the specifics of "Plan B" is classified, but Moriarty indicated the issue had been taken more seriously in recent months and included submarines and non-submarines.

"I have certainly thought more about this issue over the last 12 months, because it became clear to me that we were having challenges with the Attack Class programme," he said.

In 2015, Australia launched a contest to find a replacement for its Collins class submarines, specifying that they must be superior to anything in the region, with long-range and advanced sensors and weaponry.

Naval won that bid, beating out ThyssenKrupp Marine Systems of Germany, which is not said to be part of the Plan B programme.

Australia is boosting defence spending as it looks to a rapidly rising and more assertive China and as decades-old American security guarantees look less ironclad.

arb/hr/leg

NAVAL GROUP

THYSSENKRUPP