A defence force proposal to award a Spanish shipyard a R1,7-billion contract to build four naval corvettes has sparked a cabinet outcry and accusations of  foul play.

During a briefing on the corvettes last week, ANC ministers accused military and navy chiefs of high-handedness and of attempting to sideline them, cabinet sources said this week.

And representatives of Europe's shipyards, who stand to lose the lucrative contract, have accused the defence force of not playing fair. They say the tender process was flawed.

In a last-minute scurry to try to influence the outcome of crucial cabinet discussions on the contract this Wednesday, the head of a German consortium which was told in December that it was no longer in the running for the contract was in Johannesburg to seek the National Union of Metalworkers' support for its bid.

The German chancellor, Helmut Kohl, has also written to President Nelson Mandela asking that the German proposal receive a sympathetic hearing.

A delegation representing the British Yarrow shipyard arrives tomorrow to promote what they say is an "excellent proposal".

The Spanish bid is favoured by the military because the shipyard claims to be able to build the corvettes more cheaply, it has a rand-for-rand countertrade package and it proposes RDP projects that could create 20 000 jobs.

Sources said that the defence force chief, General Georg Meiring, and the navy chief, Vice-Admiral Robert Simpson-Anderson, had briefed the cabinet last week on the need for a corvette programme.

They had recommended that, of the two remaining contenders, the Spanish shipyard Bazan should win over the British shipyard.

Sources said that Trade and Industry Minster Trevor Manual had strongly objected to having not been consulted by the defence force on the way the countertrade component impacted on his portfolio.

"I am the Minister of Trade and Industry and I will not tolerate being bypassed," he is alleged to have said. Approached personally this week, Mr. Manuel declined to comment on "cabinet leaks".

A cabinet source said that other ministers has also complained that they should have been consulted.

One cabinet minister described the style of the generals' corvette presentation as that of "encyclopaedia salesmen".

Transport Minister Mac Maharaj had expressed his dissatisfaction when Vice-Admiral Simpson-Anderson could not tell him who the enemy was that South Africa needed protection from, cabinet sources said.

Many ANC ministers oppose the corvette programme as unnecessary expenditure in the face of socio-economic needs. There is a lobby that will vote against buying the corvettes. One minister said the generals had also raised the hackles of some ministers by saying that unless they were given the corvettes, the navy would not survive. This was felt to be a threat.

A cabinet minister said this week that he was not convinced the Spanish countertrade guarantees would materialise.

A source said the cabinet had decided it needed more time to discuss the defence force's recommendation.

The cabinet secretary, Jake Gerwell, said the corvette programme was likely to be discussed further at this week's cabinet meeting.

Vice-Admiral Simpson-Anderson and Armscor's chief, Tielman de Waal were also criticized when they briefed the joint parliamentary defence committee on the corvette tender process this week.

The committee's chairman, Tony Yengeni, said he had written to Mr Mandela two weeks ago asking that the cabinet not take a decision on the corvette programme until the committee had made its recommendations.

Representatives of European shipyards and spokesmen from interested countries have also criticised Armscor and the defence force's conduct.

Three of the shipyards - Denmark's Svendborg, France's DCN and Germany's Blohm and Voss - received a curt fax from a middle-ranking Armscor official two days before Christmas last year informing them that they had been eliminated in the tender process.

The Danish Ambassador, Alf Jonsson, said that after so much effort and investment the fax to Svendborg had been like a "cold douche".

He said Svendborg still considered itself in the running as it did not consider the Armscor fax valid.

A senior French executive from DCN said yesterday that he was unhappy that his shipyard had not been allowed to make a presentation of its offer or to discuss the countertrade aspect with the defence force.

Jurgen Koopmann, the managing director of the German consortium, said that he shared the French shipyard's complaint about the tender process.

He was also dissatisfied that, despite two assurances from Deputy President Thabo Mbeki this year that the Germans were still in the race, Armscor had maintained Blohm and Voss's disqualification.

He likened the choice of the Spanish ships over the German's to choosing "a pick-up truck with a gun attached over an armoured personnel carrier".

Yarrow's managing director, Murray Easton, said he would be in South Africa tomorrow to present his shipyard's offer to the public. He would not accept that the Spanish had won the tender until a final decision was announced.

The Deputy Defence Minister, Ronnie Kasrils, said yesterday that the tender process had been above board and correct.

"I wouldn't bet on who is going to get it. the cabinet might decide to throw open the process again," he said.

The cabinet was also entitled to reject the entire programme, he said.

With acknowledgment to Edyth Bulbring and Sunday Times.