AUSTRALIA'S intelligence agencies believe China is hiding the extent of a huge military build-up that goes beyond national defence and poses a serious threat to regional stability.

A strategic assessment by the agencies found China's military spending for 2006 was $90 billion - double the $45 billion announced publicly by Beijing.

Australia's peak intelligence agency, the Office of National Assessments, as well as the Defence Intelligence Organisation and the Defence and Foreign Affairs departments concluded that China was building a military capability well beyond its priorities of self-defence and preventing Taiwan's independence.

''China's longer-term agenda is to develop 'comprehensive national power', including a strong military, that is in keeping with its view of itself as a great power,'' says a copy of the secret assessment provided by Foreign Affairs officials to the US embassy in Canberra.

''We agree that the trend of China's military modernisation is beyond the scope of what would be required for a conflict over Taiwan. Arguably China already poses a credible threat to modern militaries operating in the region and will present an even more formidable challenge as its modernisation continues.''