The Virginia Class Submarine - buy it if we can - best SSN in the world (along with the Akula II). Will the US trust Australia with Virginia technology? Click image to expand so its readable.-
For an excellent description of the Roles and Requirements for Autralia's Future Submarine see Asia Pacific Defence Reporter, April 6, 2011 http://www.asiapacificdefencereporter.com/articles/134/ROLES-AND-REQUIREMENTS-FOR-AUSTRALIA-S-FUTURE-SUBMARINE .
The Australian Strategic Policy Institute (ASPI) has written an update on the Future Submarine SEA 1000 program. This ASPI Report is 'Mind the gap: getting serious about submarines' Strategic Insights 57 - Thursday, 19 April 2012 http://www.aspi.org.au/publications/publication_details.aspx?ContentID=335&pubtype=-1 (see 'Download PDF' which is free).
On page 15 the option of buying nuclear has received an increasingly serious airing, though significant problems remain - particularly US willingness to transfer extremely sensitive nuclear technology. The ASPI update includes (p.15) a nuclear issue I raised in 2009 - that is any US export of a submarine reactor would probably include 85% HEU (low end weapons grade) fuel - a complex proliferation issue.
Australia's future submarine program is desperately late as ever but the longer the wait the higher the chance that US Virginia Class nuclear submarines might be selected. France, should also be watching this process as Brazil might not be the only nuclear submarine customer.
I think Australia should put its long term submarine acquisition planning on hold until the US is serious in making the nuclear submarine option possible.