The Navy hopes to boost funding for the next-generation destroyer that Maine’s Bath Iron Works hopes to build, according to an industry newsletter.

Deputy Defense Secretary Paul Wolfowitz has approved Navy Secretary Gordon England’s proposal to increase funding for the so-called DD-X destroyer program by $2.5 billion over three years, according to Inside the Navy.

The Bath shipyard’s parent company said the news showed support from the administration but a spokeswoman for Republican Sen. Susan Collins, a member of the Armed Services Committee, cautioned that it’s not a done deal.

“This additional funding request is a long way from final approval. But this is another indication of the Department of Defense’s commitment to moving this important program forward,” said Jen Burita, Colllins’ communications director.

The Bath shipyard is designing the DD-X jointly with Ingalls Shipbuilding of Pascagoula, Miss., which is leading the design effort. Both yards and perhaps others are expected to compete for contracts to build the ships.

Bath Iron Works and Ingalls share construction of current generation DDG-51 destroyers. More of the work has gone to BIW after Ingalls began construction of LPD-17 amphibious transport ships.

The Pentagon’s shipbuilding budget is often contentious because each ship is so expensive – destroyers cost more than $1 billion each. Bush proposed a $12.2 billion shipbuilding budget last year, which industry and defense advocates complained was too small to maintain a 300-ship fleet.

According to Inside the Navy, Wolfowitz approved the Pentagon budget Dec. 30 by signing a document not intended for public release.

The increased funding for the DD-X was not unexpected because the size of the ship has increased to 14,000 tons and its costs hadn’t been updated recently, according to the newsletter.

The budget plan would buy one DD-X destroyer in 2005, none in 2006, two each in 2007 and 2008 and three in 2009. But the newsletter cautioned that some in the Pentagon are skeptical that DD-X construction will reach three ships per year because of competing priorities such as submarines.

Nonetheless, General Dynamics, Bath Iron Works’ parent company, was encouraged by the report. “This is extremely important,” spokesman Kendell Pease said. “It’s a very positive indication that this administration believes in shipbuilding.”

AP-ES-01-06-04 0851EST