By Marius Zaharia

SINGAPORE (Reuters) - Singapore will decide "soon" on an estimated $1-billion purchase of new military helicopters which it had delayed after the crash of a civilian aircraft made by one of the bidders, Defence Minister Ng Eng Hen said on Thursday.

The tiny city-state has the largest defense budget in Southeast Asia at a time when China's increasingly assertive actions in the disputed South China Sea waterway spur regional nations to step up defense spending.

Singapore put on ice its plans to replace 32 ageing Super Pumas after the April 29 crash of a civilian Airbus Super Puma, whose military version had been the frontrunner to clinch the helicopter order.

The city-state, a customer highly sought-after by military contractors, had been expected to announce its decision in the first half of this year, after 18 months of evaluation.

"We are finalizing evaluations for the replacement," Ng told reporters. "We will announce it soon."

He gave no estimated timeframe, however.

The race for the contract is between Airbus Helicopters and Italian firm Leonardo Finmeccanica. It would be the first major test of confidence in the military version of the aircraft since the crash that killed 13 people off Norway.

"When there are developments, the evaluation committee will look into it," Ng added. "You cannot ignore it, and that goes for every platform."

Singapore's fleet of F15 and F16 fighter jets currently meets requirements, said Ng, although experts had expected the country to order the Lockheed F-35 Joint Strike Fighter by the end of the decade.

"We are watching it, but no hurry at all, and there is no fixed timeline that we need to make an evaluation," Ng said.

The city state is also studying tactical lift helicopters to replace its Boeing Chinooks, Ng said.

Singapore could upgrade its air capabilities beyond helicopters by expanding airbases at Tengah and Changi, with a "smart air base" potentially set up at the latter to enable aircraft launch and recovery with automated systems, he added.

Two new type 218SG submarines produced by Germany's ThyssenKrupp will join the fleet from 2020.

To protect against terror attacks, Singapore will set up a battalion-sized Army Deployment Force of skilled soldiers, capable of responding within minutes.

Ng said it was "unfortunate" that ASEAN leaders retracted a common statement on the disputed South China Sea, where Singapore is not a claimant, at a meeting of foreign ministers of the Southeast Asian grouping in June.

"We would wish that it could have gone better, but things are as they are," he said.

(Reporting by Marius Zaharia; Editing by Clarence Fernandez)