Military satellite axed as it can be 'shot out of sky'

The scrapping of a multibillion-dollar military project is being defended on the basis adversaries can "literally shoot satellites out of the sky" as questions over Australia's capabilities persist.

The Australian Defence Force cancelled a communications system being built by Lockheed Martin, saying it wasn't going to meet the nation's military needs due to the acceleration of space technology.

The ADF will instead prioritise a multi-satellite system because of the threat new weapons pose to the older tech, Defence Minister Richard Marles said.

Using multiple, spaced-out micro satellites was more effective, which had been proven in Ukraine, Mr Marles said.

"It's not a cancellation, it's really a change of direction in terms of how we deliver the capability for our communications network in Defence," Mr Marles said.

"This original plan goes back seven, eight years and ... since then, we've seen technologies develop which can literally shoot satellites out of the sky.

"But we've also seen technologies develop where you have thousands of micro satellites in a much more distributed way providing the same effect."

Opposition defence spokesman and former SAS soldier Andrew Hastie chastised the decision to scrap the project, saying it left the military vulnerable.

The Defence Department maintains current communication systems meet immediate needs.

The US accused Russia of developing a space-based nuclear anti-satellite weapon in February - which Moscow denied - and there are concerns of a Chinese anti-satellite weapons build up after it launched its first test in 2007.