Prime Minister Tony Abbott has apologised for using the term "holocaust" in response to a question in parliament about the future of Australia's multi-billion-dollar submarines contract.

The Government has been under pressure over how it will award the work, after it emerged on the weekend that Mr Abbott had reassured a Liberal MP, in the lead up to Monday's party-room vote on his leadership, that Australia's shipbuilding company would be allowed to compete.

In the election campaign the Coalition promised that the next fleet of submarines would be built by the South Australia-based shipbuilding company ASC, but it has since opened the way for foreign companies to win the contract, triggering speculation that Japan is the frontrunner.

The Opposition continued to press the Government over the issue in Question Time, asking the Prime Minister when he would deliver that promise, given South Australia's latest jobless figure of 7.3 per cent.

In a rowdy Question Time, Mr Abbott went on the attack.

"Under members opposite Defence jobs in this country declined by 10 per cent," he said.

"There was a holocaust of jobs in Defence industries under members opposite."

He withdrew the term, changing the description to a "decimation of jobs", and later apologised.

"In answering one of numerous questions about submarines, I should not have used the term holocaust," he said.

"I shouldn't have used it. I did withdraw it, I do apologise for it."

The Holocaust is a term usually applied to the Nazi genocide of Jews and other minorities during World War II.

Abbott jumped in to answer question to Defence Minister

And in an unusual move, Mr Abbott jumped in to answer another question urging the Government to "come clean" about what it had promised Japan.

The Opposition had directed the question to Defence Minister Kevin Andrews.

Mr Abbott accused Labor of "constant denigration of Japan and the Japanese" and said: "Absolutely I have raised with the prime minister of Japan the subject of submarine cooperation".

"My duty is to ensure that Australia has the best possible submarines for the best possible price when we need them."

He said he had also raised the issue with the leaders of France and Germany.

"We are exploring submarine cooperation with the countries that have the expertise to give us the submarines that we need," he said.

Opposition assistant defence spokesman David Feeney also asked whether the Defence Minister's office or department had any draft documents preparing for an announcement that Japan had won the contract.

Mr Andrews did not answer the question but said the Government had not made a decision.

"How many times do I have to say it? We have not made a decision," he said.

Yesterday, Mr Abbott mocked suggestions an open tender should be held, saying that could result in "Kim Jong-il-class submarines" or "Vladimir Putin submarines".