UN watchdog to consider world atom fuel supply bank

VIENNA, Sep 22 (Reuters) Proposals for a global nuclear fuel bank meant to boost economic development while stemming the spread of atom bomb know-how are to be put to a UN watchdog's decision-making board in 2007, officials say.

Inspired in part by Iran's record of nuclear secrecy and stonewalling of UN investigators, the handful of proposals were put to a special debate by the International Atomic Energy Agency's 141 member nations in Vienna this week.

In general, the proposals would allow states wanting to fuel nuclear reactors for more electricity to draw enriched uranium from a multilateral reserve if they did not try to master sensitive enrichment technology themselves.

Charles Curtis, chairman of the three-day debate that ended yesterday, said the IAEA Secretariat would conduct feasibility studies and submit the results to the agency's 35-nation board of governors for consideration next year.

As the international body overseeing the peaceful use of atomic energy in nations party to the nuclear Non-Proliferation Treaty, the IAEA would probably administer a fuel reserve.

Officials conceded a major obstacle to acceptance of the initiative had yet to be overcome -- the perception that it could strip developing nations of energy sovereignty and allow a small club of industrialised powers to control supply.

Tariq Rauf, the debate's scientific secretary and a top aide to IAEA director Mohamed ElBaradei, said earlier indications by some of the proposals' sponsors that recipient nations ''would have to give up rights'' had clearly triggered resistance.

A high-profile proposal in June by the United States, Russia, Britain, Germany, France and the Netherlands to supply a global enriched uranium bank got a cool reception at the IAEA from many other nations who saw it as discriminatory.

RENUNCIATION OF RIGHTS OUT ''The term 'renunciation' (of rights) was not in the vocabulary of the debate now. That might have been the discourse a few months ago. But we've moved away from it now. The proposals now (emphasise) choice...,'' said Rauf.

But for such plans to win broad credibility, he said, they may have to make some concessions to sensitive national pride.

''It seems that as a result of the (debate), one way forward would be for some states to have a very small research and development capability for enrichment, while continuing to rely on (enriched uranium supplied from abroad),'' he said.

That formula might be opposed by the United States and other enrichment powers, mostly Western allies and Russia, behind the proposals. They aim to keep technology with bomb-making potential away from unstable regions, like the West Asia.

Iran says it wants to enrich uranium only for electricity.

The West suspects a camouflaged quest for nuclear weapons, and threatens to seek UN sanctions on Iran soon unless it suspends enrichment and negotiates to obtain trade incentives on offer.

But many developing nations see a double standard in the West doing nothing about Israel's reputed nuclear arsenal while striving to shut down Iran's nuclear fuel programme, fearing a precedent that would curb their own atomic energy options.

Demand for nuclear energy is booming because of soaring oil and gas prices and global warming linked to fossil-fuel use.

After the six-nation plan emerged, six other countries -- Australia, Canada, South Africa, Kazakhstan, Argentina and Ukraine -- raised the prospect of enriching uranium themselves.

But Rauf said there were now many examples of countries reliant on nuclear energy that choose to import enriched uranium as a cheaper alternative to domestic enrichment plants.

Curtis said the key was to build confidence that an international fuel bank would constrain the latitude of any one major power to impose politically motivated curbs on supply.

Reuters DKS VP0533