Australia has ended its ban on uranium sales to India. The country has so far refused to sell the nuclear fuel to countries that have not signed the nuclear Non-Proliferation Treaty, but Foreign Minister Alexander Downer has convinced his Cabinet colleagues that a uranium deal with India is in Australia's interest. From Sydney, Phil Mercer reports.

The decision to sell nuclear fuel to India was made by the National Security Committee in Canberra.

Australia feels it is now able to sell to India following a landmark deal last month between New Delhi and the United States.

That agreement allows the Indians to buy civilian nuclear technology and fuel from the U.S. while still possessing nuclear weapons. This makes India an exception under the Non-Proliferation Treaty - or NPT, as it is also known.

Australia has previously sold uranium only to countries that have signed the NPT.

Under the proposed agreement, Australian nuclear inspectors would be allowed to check that the uranium is used only for peaceful purposes, and not diverted for India's nuclear weapons programs.

Australian Foreign Minister Alexander Downer gestures as he answers questions from reporters during the 14th ASEAN Regional Forum in Manila, Philippines, 2 Aug. 2007

"We would first of all have to negotiate a nuclear safeguards agreement with India, and under that agreement, any uranium that would be exported to India would have to be subject to International Atomic Energy Agency monitoring, and so would the nuclear power plants that the uranium was used for," he said.

Downer says he does not believe the sale of uranium will provoke tension between India and its neighbor, Pakistan.

Australia argues that any plan to bring India's civilian nuclear program under the auspices of U.N. inspections can only enhance peace on the sub-continent.

Australia has the world's largest known reserves of uranium. It has been under pressure to sell the nuclear fuel to India since agreeing last year to supply it to China, which has signed the non-proliferation treaty.

Both India and China already have nuclear weapons, and say they want Australian uranium only for peaceful purposes - to supply nuclear power stations to meet the soaring energy demand from their booming economies.

But some defense analysts have argued Australia's decision could have a destabilizing effect.

The plan to export to India could be abandoned altogether if the opposition Labor Party wins this year's general election.

Labor - which is well ahead in the opinion polls - says it would be impossible to lock in safeguards to prevent New Delhi from using Australian uranium for military purposes.