The Canadian navy is pulling three ships out of planned NATO exercises off Nova Scotia next week, citing a lack of funding.

There's no money for the warships to join the U.S. and German ships, navy officials said Friday.

"It looks like we're going to wait to use our training assets, our training funds, and what we have available for later on in the quarter," said Canadian Commodore Denis Rouleau, who handed over command of the NATO fleet.

The decision to tie up the three ships follows a decision two weeks ago to cancel a scheduled sovereignty exercise.

HMCS Halifax was supposed to patrol off Newfoundland, but the navy couldn't afford fuel. Hours after CBC News aired the story, Defence Minister Gordon O'Connor said $3.5 million would be made available and the ship was ordered to sea.

Now the navy says other exercises and missions could be cancelled because of the budget crunch.

Dangerous game

Defence analyst Steve Staples suggested the navy may be playing politics to get more money in the next budget.

"I think they're playing a dangerous game by trying to embarrass the government," said Staples, with the Ottawa-based Rideau Institute.

Canadians want a military that defends our sovereignty, he said, so the defence minister should tell the navy to get those ships out and "quit playing games."

The American admiral who heads the NATO fleet said Canada's ships will be missed.

"I'm sure it would be valuable to us to have Canadian ships sail with us," said Rear Admiral Michael Mahon.

At this point, only American and German ships will take part in the NATO exercise, which begins Monday plying the waters between Halifax and Boston.