South Korea said Thursday it would re-open bidding on a $7.4 billion fighter jet deal next month, citing high prices presented by three aviation giants vying for its largest defence contract to date.

The Defence Acquisition Programme Administration (DAPA) announced the decision in a meeting chaired by Defence Minister Kim Kwan-Jin, after initial bidding procedures were temporarily suspended.

The project to buy 60 advanced planes was launched to replace an aging fleet of F-4 and F-5 jets introduced decades ago.

It has been delayed for months because of South Korea's position that the price should not exceed the 8.3 trillion won ($7.4 billion) approved by parliament.

"We've decided to resume bidding" in mid-August under the same conditions as previously, DAPA spokesman Baek Yoon-Hyeong told reporters.

The project comes as the world's biggest defence groups seek to overcome drastic cutbacks in military spending in the US and Europe.

US companies Boeing and Lockheed Martin and the European aerospace consortium EADS were competing for the South Korean contract, with all prefacing their bids with various sweeteners to try and edge out their rivals.

The choice had been between Boeing's F-15 Silent Eagle, Lockheed Martin's F-35 Lightning II and the EADS Eurofighter Typhoon.

EADS has offered a $2.0 billion investment in a separate South Korean project to develop its own advanced fighter jets if the consortium is chosen.

Lockheed Martin has offered to support South Korea's effort to develop and launch military communications satellites, while Boeing promised to buy billions of dollars in parts from Korean companies.

South Korea's military procurement needs, especially where the air force is concerned, have overwhelmingly been met by US suppliers in the past -- a reflection of their close military alliance.

But EADS' hopes were raised in January, when the Anglo-Italian company AgustaWestland beat out US defence giant Sikorsky for a $567 million contract to supply six helicopters to the South Korean navy.