Tony Abbott is treating South Australians with contempt by refusing to honour a pledge to build new submarines in Adelaide, the state government says.

France, Germany and Japan will be invited to formally enter the contest to build and design Australia’s new submarines under a process announced on Friday.

Sweden has been cut from the shortlist, despite offering to build the subs in Australia if chosen.

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The shortlisted nations will be asked to supply options for construction in Australia, overseas or both, Prime Minister Tony Abbott says.

The deal raises the prospect that much of the construction could be carried out overseas, despite a pre-election promise to build the subs in Adelaide.

SA Defence Industries Minister Martin Hamilton-Smith says there is growing sentiment that the prime minister is treating South Australians with contempt.

“The government has not moved away from a process which could appear to industry to be rigged to bring about a pre-determined outcome,” he told AAP on Friday.

“I’m mystified that the prime minister and the minister for defence have ruled the Swedes out of contention without even giving them the chance to present their offering in a competitive process.”

The prime minister told reporters in Adelaide that ‘at least’ 500 new maintenance jobs would be created at ASC, with potential for more to be added during construction.

Mr Abbott emphasised comments by ASC chief executive Stuart Whiley on Thursday that the shipbuilder currently had “enough work” to sustain its workforce for 20 years.

“There is a long and bright future for the ASC,” Mr Abbott said.

This was akin to saying that Holden, Ford or Toyota had sustainable work, Mr Hamilton-Smith said.

“That is a death sentence for the shipbuilding industry,” he said.

“Unless there is a new model, there is no future.”

Premier Jay Weatherill said the claim of 500 new jobs had been “plucked out of the air”.

“If the prime minister of Australia breaks this promise, serious doubts will be raised about his judgment and his capacity to lead this nation,” he told reporters.