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The Reichstag building, the seat of the lower house of parliament Bundestag is pictured next to the Spree river in Berlin, Germany, February 25, 2016. REUTERS/Fabrizio Bensch

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By Andrea Shalal

BERLIN (Reuters) - The German military has decided to replace its ageing short-range air defence systems and help fill a gap that has caused concern among NATO allies following Russia's annexation of Crimea, a defence ministry spokesman said on Thursday.

U.S. and German military officials last year identified a growing gap in short-range air defence weapons, or SHORAD, in Europe, including the ability to defend against a swarm of unmanned aircraft or drones.

"The decision has been made to start the process of closing the gap that will occur when the current short-range air defence capability goes out of service," the German spokesman said.

A source familiar with the plans told Reuters last month such a decision would pave the way for a procurement programme valued at 460 million euros (£396 million) till the middle of the next decade, with 2 billion euros in further spending likely in a later phase.

A ministry document showed the programme could cost a total of 3.3 billion euros through 2030, excluding possible laser technology upgrades that could be added to the system later, a source familiar with the document said on Thursday.

The document said a budget increase would be required to avoid a negative effect on other procurement programs.

As a next step, the ministry will now map out its functional requirements and then draft a formal acquisition strategy.

Germany, under pressure from new U.S. President Donald Trump to increase military spending, has identified missile defence as a priority in a 2016 'white paper'. It is working with the Netherlands to better coordinate NATO air and missile defences.

NATO wants Germany to provide very-short-range defences for 10 fire units, short-range capabilities for six additional fire units and counter rocket, artillery and mortar defences for four fire units, according to the source.

Acquisition decisions on the new air defence equipment are not expected until 2018 or later, but the ministry could add some 20 million euros to the defence budget this year to fund initial work on the programme, sources familiar with the plans have said.

Russia's annexation of Ukraine's Crimea peninsula in 2014 and its support for separatists in eastern Ukraine have prompted NATO members to consider beefing up Europe's defences, though Trump has signalled he now wants to improve ties with Moscow.

(Reporting by Andrea Shalal; Editing by Gareth Jones, Larry King)

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