Denmark has set aside 2.74 billion Danish crowns ($400 million) to strengthen surveillance and intelligence in the Arctic and North Atlantic with long-range drones, as part of a wider framework agreement to revamp its defence and meet NATO goals.

The long-range drones would help monitor increasing civilian and military activity in the Arctic and North Atlantic and ensure Denmark can better comply with NATO goals, the Danish defence ministry said.

The shrinking ice sheet in the Arctic has fast-tracked a race among global powers for control over resources and waterways.

Denmark is responsible for security and defence of the Arctic island of Greenland and the Faroe Islands in the North Atlantic, both sovereign territories of the Kingdom of Denmark.

"The Kingdom must in the future take greater responsibility for security in the entire region. This means that we need to use more muscle in the Arctic and the North Atlantic," Defence Minister Troels Lund Poulsen said late on Thursday.

Denmark pledged last year to invest 143 billion crowns in defence over the next 10 years.

Investing in drones is part of the first commitment under that pledge. Thursday's agreement set aside 16 billion crowns in total, which also included air defence systems and restarting a mothballed ammunition factory in northwestern Denmark. ($1 = 6.8537 Danish crowns) (Reporting by Louise Breusch Rasmussen, editing by Jacob Gronholt-Pedersen and Alex Richardson)