While government sources had not ruled out going with an alternative to the French-built submarines,they conceded it was unlikely. The government is expected to take months to formally sign off on the new proposal.

A separate in-principle agreement,likely to be inked in the coming weeks,will require Australian content to be agreed upon for each stage of work to achieve Naval Group’s commitment to spend 60 per cent of the program cost within Australia during the life of the project.

The company’s Australian chief executive John Davis said he and Mr Pommellet had “very constructive and welcoming meetings with ministers and defence officials during his visit to Australia last week”.

“I believe significant progress has been made on the Commonwealth government and Naval Group’s joint plans to continue creating Australian jobs,” he said.

“Naval Group looks forward to being able to contractually cement that shared commitment with the Commonwealth,and building even greater sovereign capability in Australia.”

The Sydney Morning Herald andThe Age last year revealed Defence officialsknew the attack-class submarines would cost almost $80 billion as early as 2015 - before Naval Group was chosen - despite publicly stating at the time the estimated price tag was $50 billion.

The estimated cost has since increased to about $90 billion.

Marcus Hellyer,a senior analyst at the Australian Strategic Policy Institute,said it was still possible for the government to choose an alternative,but the Coalition government has staked its credibility on the French build.

“The further you down the path,the more money you spend - we’re getting upwards of $2 billion spent on this project already,” he said.

“There’s also the sunk cost of time.”