The Australian navy’s new submarine fleet could cost taxpayers at least $5bn less than had been expected, according to a report based on secret price estimates given to the defence department by three international competitors.

The confidential bids lodged by Germany, France and Japan offered a much lower cost of building an eight-submarine fleet in Adelaide than had been anticipated, newspaper the Australian reported.

The savings are in the range of $10bn to $12bn, when it was previously expected the project would cost about $20bn, based on a 12-boat fleet.

If the government decides to build 12 submarines instead of eight, the bidders estimate the cost will reach about $15bn - a potential $5bn saving.

The lower cost estimates are said to reflect the competition between bidders to secure the deal.

The government says it will choose the winning bidder by mid-2016 in what has been a politically heated process since the Coalition government took office.

With AAP