By Andrea Shalal-Esa

WASHINGTON, July 24 (Reuters) - The U.S. Navy on Thursday confirmed its plan to terminate a $29 billion next-generation DDG-1000 warship program after two ships, and said it would order eight older-model DDG-51 destroyers instead.

Maine Republican Sen. Susan Collins, who first disclosed the news this week, and 11 other senators on Thursday sent a letter asking Defense Secretary Robert Gates to rescind the decision until a thorough analysis is conducted, and Congress has had time to study the plan.

On Wednesday, Collins said Navy officials told her they would order nine more DDG-51 destroyers.

Navy spokesman Lt. Clay Doss said the Navy had truncated the DDG-1000 program in its budget plans for fiscal year 2010, avoiding potential program termination fees.

General Dynamics Corp (GD.N: Quote, Profile, Research), which has a large shipyard in Maine, and Northrop Grumman Corp (NOC.N: Quote, Profile, Research), with its Mississippi facility, are building the first two DDG-1000 destroyers. The two companies also build the DDG-51 warship.

Navy Secretary Donald Winter and Chief of Naval Operations Adm. Gary Roughead have been briefing lawmakers since Tuesday.

"We are discussing with congressional leadership how to best ensure that our investment strategy is consistent and aligned with our nation's warfighting needs," Doss said. The DDG-51 is "a proven multi-mission ship that better serves our needs, particularly integrated air missile defense, ballistic missile defense, and anti-submarine warfare," he said.

Opting for the cheaper DDG-51 warships instead of the seven DDG-1000 destroyers it once planned to buy would allow the service to reach its goal of a 313-ship fleet sooner, he said.