NZ holding up India-US nuke pact

New Zealand diplomats last night played a major role inside a secretive international group to block a nuclear deal between India and the United States.

The 45-member Nuclear Suppliers Group (NSG) - which includes New Zealand - was meant to have approved the deal in Vienna, Austria, but consensus was not reached.

In an unusual situation Wellington, along with Austria, Ireland, Norway and Switzerland, have the power to block NSG approval for India.

New Zealand's stance over the deal has won front page headlines in the Indian media who clearly do not know what to make of having their nuclear dream frustrated by what headlines tag "hardline non-proliferationists".

Indian Prime Minister Manmohan Singh has invested his political future in a treaty with the US in which Washington will supply India with civilian nuclear fuel and technology. He narrow survived a confidence vote last month in push through the deal on his side. 

New Zealand refuses to accept the deal saying India cannot have it because it has not signed the Nuclear Non-Proliferation Treaty (NPT). India wants a waiver from the rule.

On Tuesday Prime Minister Helen Clark said that New Zealand, as a nuclear free state, was concerned about the deal.

She said New Zealand was working with "like minded" countries.

New Zealand would attend the NSG and listen carefully to the other countries.

 "It would be no secret that we would like to see more conditionalities around the agreement," she said.

The Press Trust of India quoted diplomatic sources in Vienna this morning as saying no member country opposed an NPT waiver for New Delhi but some unnamed member countries proposed amendments to the draft of the exemption.

Officials and diplomats said a "lot of ideas" were exchanged during the day-long intense deliberations of the 45-nation grouping on whether or not India should be allowed to have civil nuclear trade with international community.

The Hindu newspaper, quoting an unnamed participant from a former Eastern Bloc country, said the meeting opened with the United States urging the adoption of the waiver as it stood "in a nice but not so forceful way."

The diplomat said Austria, Ireland, New Zealand and Switzerland expressed concerns.

New Zealand's basic objection appears not to involve the specifics of the India deal, but over its concerns that the NPT itself is being weakened. It did ask why India should be given a waiver.

The meeting was unable to reach a decision and will hold another one next week.

Under NSG rules, all nuclear trade with India is banned because it refuses to sign the NPT.

The United States argues that the deal will bring India closer into the NPT fold after 34 years of isolation and help combat global warming by allowing the world's largest democracy to develop low-polluting nuclear energy.

The deal is on a tight timetable and NSG delay could kill it as it needs to be passed by the US Congress before the end of the term of President George Bush at the end of the year.

New Zealand's anti-nuclear principles could cause problems with a country Wellington has been strongly courting over the last five years.