Japan is ready to match European rivals and build a fleet of submarines for Canberra entirely in Australian shipyards, a senior Japanese official said Tuesday, after stumbling in its effort to win a contract worth 50 billion Australian dollars or $34.76 billion.

Tokyo was willing to train hundreds of Australian engineers in Japan's submarine-manufacturing hub of Kobe as well as in Australia as part of its offer for one of the world's biggest defense contracts, said Masaaki Ishikawa, director general for Acquisition Reform at the Ministry of Defense.

His comments are the first from an official directly involved in the bid to the effect that Japan is willing to build the stealth submarines entirely in Australia, where jobs are a hot-button political issue. Canberra is expected to order between eight to 12 vessels.