Australia formally embarked yesterday on a hotly-contested programme to equip its navy with nuclear-powered submarines in a new defence alliance with Britain and the United States.

Defence Minister Peter Dutton joined US and British diplomats in signing an agreement allowing the exchange of sensitive "naval nuclear propulsion information" between their nations.

It is the first agreement on the technology to be publicly signed since the three countries announced in September the formation of a defence alliance, AUKUS.