Cambodia has razed a US-funded defence facility on its southern coast, the deputy prime minister confirmed Sunday, the latest move in the ongoing controversial expansion of a strategically crucial naval base being developed with Chinese aid.

The Wall Street Journal reported last year on a secret draft deal allowing China to dock warships at the Ream naval base near the kingdom's coastal city of Sihanoukville. 

But Cambodia -- awash in recent years with Chinese investments -- has strenuously denied the report, although strongman premier Hun Sen has said aid from Beijing will fund the naval base's development. 

Satellite images released by the Center for Strategic and International Studies this week showed a US-funded facility on Ream's naval base had been demolished, raising questions "about rumoured Chinese access", said the Washington-based think tank. 

But Tea Banh, Cambodia's deputy prime minister and defence minister, dismissed concerns Sunday. 

"We relocated the facility to a new spot. We cannot keep it anymore and the building is already old," he told AFP, confirming that it was knocked down last month.

The Tactical Headquarters of the National Committee for Maritime Security was inaugurated in 2012. 

It will be "far better" in its new location, Tea Banh said, adding that Cambodia used "only a small assistance" from the US for the now-demolished building.

The new facility is currently under construction about 30 kilometres (18 miles) north of Ream. 

The Ream base has generated scrutiny for its strategic location in the Gulf of Thailand, which would provide ready access to the fiercely contested South China Sea -- a key global shipping route.

Beijing claims the majority of the resource-rich sea, vying with six other countries.

Hun Sen has repeatedly insisted Cambodia's constitution forbids any foreign military base within its borders. 

Analysts say the wily premier is deeply attuned to the potential for an anti-China backlash from the public -- especially in Sihanoukville, where businesses and casinos are largely now Chinese-owned. 

One of the world's longest-serving leaders, Hun Sen has in recent years tilted away from the US due to Washington's criticism of his government's alleged abuses. 

On Saturday night, he issued a public letter wishing US President Donald Trump a "speedy recovery" from the coronavirus.