The system has already cost millions

The United States is working to develop a shield against ballistic missiles which it believes countries like North Korea could soon use to threaten it.

Last month's US defence budget allots $9bn for developing the system, which has had a mixed record in tests so far.

Canberra's involvement will "serve our strategic interest" said Foreign Minister Alexander Downer, but there are no plans for bases in Australia.

Mr Downer said that participation would help Australia "to make an important contribution to global and regional security".

"We are concerned about rogue states developing ballistic missiles... It's a precautionary measure to have a system to take out those missiles if they ever lead your way," he said.

However, the extent and nature of Australia's role would be determined by a number of factors, including:

• regional considerations

• industry capabilities

• financial considerations

• Australia's own strategic defence needs.

Although Defence Minister Robert Hill ruled out any bases on Australia's soil, there may be a role for three new destroyers planned for the country's navy.

"We think that we can play a part, obviously a small part in terms of the massive overall programme," said Mr Hill.

"We think that with the proliferation of long-range missiles and trends towards proliferation of mass destruction warheads, it is a sensible decision for Australia to take."

Mr Downer said that initially Australia hoped to participate in research and development work.

Canada started formal talks earlier this year on its possible participation.

It is expected that RAF Fylingdales in northern England will be expanded to serve as an early warning station for use in the US programme.