Mr Chester said the government remains hopeful of locating the aircraft but that the search will be suspended when the 120,000-square-kilometre zone is completed and"unless credible evidence is available that identifies the specific location",as agreed by a multilateral meeting in July.

The recommendation to extend the search follows a meeting in November between crash investigators,aviation experts and government representatives from Malaysia,China and Australia.

Malaysia queried the ATSB report on Tuesday,saying it remains to be seen how it could be used to help identify the plane's location.

"I wish to reiterate that the aspiration to locate MH370 has not been abandoned and every decision made has and will always be in the spirit of co-operation among the three nations,"said Malaysian Transport Minister Liow Tiong Lai.

The report states experts still believe it is somewhere along what is called the"seventh arc"- a line calculated from when the plane made its final contact with a satellite before it ran out of fuel and went into the sea.

Scientists extrapolated the search area from statistical modelling of possible flight paths based on the very scarce data available from the"handshake"contacts between the plane and the satellite.

Analysis of the wing flap debrisfound on Reunion Island was used to rule out the idea that the plane was deliberately glided into the ocean by a rogue pilot,which would have taken it further south.

In the latest report,the bureau has used different assumptions about what kind of autopilot settings were in place. The new assumptions put the likely crash site further north along the seventh arc,which the bureau says is consistent with the CSIRO drift modelling of debris that has been found,which also puts the crash site further north.

with Reuters,Lindsay Murdoch

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