CANBERRA - A decision by the Australian Army to buy 350 locally designed and developed armoured cars may be reflected in a multi-million dollar sweetener for New Zealand industry in a bid to win a major transtasman defence contract.

Australia's ADI Ltd has already made a preliminary presentation to defence officials in Wellington for its Bushmaster infantry mobility vehicle, which beat off tough international competition to gain a $A200 ($237.5) million order from Canberra.

New Zealand has a similar, but smaller, requirement, to replace its fleet of 78 Vietnam-era M113 armoured personnel carriers - so obsolete they were sheltered from front-line work in Bosnia - and for new reconnaissance vehicles.

Although the Defence Minister, Max Bradford, declined comment yesterday, saying it was too soon to discuss details of contract parameters, defence estimates last year put the cost of new armour at $160 million, with a further $16 million for reconnaissance vehicles.

The contract, expected to attract similar international interest to the Australian deal, will be among the largest under the Government's present defence capital programme.

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ADI will use Australia's decision to buy the Bushmaster as a key selling point to New Zealand, given the similarity of requirement and Wellington's policy of interoperability, under which as much common equipment will be bought as possible.

The blend of politics, economics, defence requirements. offset work and technology transfers that now play such a large role in Wellington's defence thinking has already been reflected in the controversial Anzac frigate decision, and in the Navy's new Super Seasprite helicopters.

However, it is not clear yet whether the Army will want its new armour to be tracked or wheeled, and competition is likely to come from such rivals as British Aerospace and Australian Specialised Vehicle Systems - both beaten by ADI in Australia.

The Army has also shown interest in Australia's light armoured vehicles - supplied by General Motors of Canada with input by British Aerospace Australia.

The Bushmaster can carry up to nine fully-equipped soldiers, reachspeeds of more than 100km/h, and withstand mortar blasts, anti-personnel mines, and small arms fire.