The Defence Ministry has shelved a scheme to buy eight more P-3C submarine surveillance aircraft from US arms contractor Lockheed Martin between 1999 and 2003 following its failure to force the firm to refund $25.75 million.

The ministry announced on Thursday that the International Chamber of Commerce (ICC) had rejected the ministry's demand that the US firm pay back the amount allegedly paid in excess commission on the purchase of the eight aircraft. Now ministry sources say a second order under a five-year Defence blueprint will be scrapped as officials rewrite the spending scheme, the Korea Times said.

``We had originally planned to buy eight more P-3Cs in order to beef up our anti-sub warfare capabilities,'' the senior ministry source was quoted as saying. ``But the plan has now beendropped and our decision to do so has everything to do with the ungentlemanly actions of the US Defence contractor in its initial sale,'' he added. A ministry spokesman said he was ``not aware of this and had no comment.''

The ICC's ruling in late September sought to put an end to the row which dates back to 1990 when Lockheed won a $595 million contract to sell South Korea the eight planes. Under international practices, Lockheed should have received $four million in commission, but the ministry belatedly realised the actual payment was $29.75 million, a ministry spokesman said.

The ministry took the case to the ICC in 1996 to demand a refund of the difference, but the chamber turned down the suit, saying there was no `outright and firm' evidence backing the ministry's claim.

The ICC also ruled that the statute of limitations ran out in 1995, a year before the suit was filed and five years after the signing of the initial contract, it said.

In addition, the ICC ordered the ministry to pay US $110,000in court cost and $600,000 out of the $1.5 million in expenses for Lockheed, it said.Seoul said on Thursday it was considering taking `punitive action' against Lockheed Martin, including a ban on it bidding for further contracts here.