Hamburg  - The company that makes Germany's non-nuclear submarines said Monday it had withdrawn from a contract with Athens involving four of the U-214 vessels.

The advanced vessels can remain underwater in nearly complete silence for weeks on end, thanks to their fuel-cell engines.

The company, a unit of ThyssenKrupp Marine Systems (TKMS), said it was cancelling contracts with the Greek Defence Ministry because it had not been paid 524 million euros (765 million dollars) although the submarines are ready for delivery.

They were built by TKMS unit Howaldtswerke Deutsche Werft GmbH. The other party to the contracts signed in 2000 and 2004 is a TKMS subsidiary in Greece, Hellenic Shipyards SA, which is claiming 300 million euros of the disputed sum from Athens.

TKMS said in Hamburg it now wished to put the dispute with Greece into arbitration.

The first of the contracts was code-named the "Archimedes Project", supplying the U-214 vessels, the same as those used by the German Navy. TKMS said all four were ready for delivery.

Unlike diesel-powered submarines, which must come up to the surface often to refill air in their tanks, fuel-cell vessels use minimal air.

The second contract, Neptune II, was to retro-fit three 209-class submarines with fuel-cell propulsion. It said HDW and HSY tried to deliver the first 214-class boat back to Greece in 2006, but Greece refused to accept it "although it met all standards."

HDW and HSY then conducted two years of fruitless talks with the Greek government on the issue, the statement issued in Hamburg said. It said that HDW and HSY could no longer afford to continue with the contracts.

TKMS added that it had even modernized and expanded the Hellenic Shipyards site since buying it in January 2005, providing Greece with the most modern yard to build non-nuclear submarines on the entire Mediterranean.  dpa