The Australian shipbuilding industry is reeling amidst speculation a new fleet of submarines may be built offshore.

Despite their pre-election promise that up to 12 new submarines would be built in Adelaide, a report by The Australian alleges the Abbott government is considering purchasing them from Japan or Germany.

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Building the fleet of submarines in Australia could cost an estimated $50 to $80 billion, while buying them from Japan would cost as little as $25billion.

Germany company TKMS has allegedly offered to build them for $20bn.

The demand for new submarines comes as the current Collins-Class fleet is due to be decommissioned in 2026-27.

Speaking on ABC radio, Industry Minister Ian MacFarlane insisted that no decision had been made.

“Best price is not the only determinant… there are a number of parameters in that discussion,” Mr MacFarlane said.

South Australian Labor Premier Jay Weathertrill said he did not accept that the submarines could be built overseas at a better price.

Labor Senator for South Australia Penny Wong said the government was walking away from it’s commitment to build the submarines in Adelaide, describing it: “another Tony Abbott lie”.