Australia approves uranium sales to India - report

CANBERRA (Reuters) - Australia has ended a ban on uranium sales to India, with senior ministers reversing a policy of selling the nuclear fuel only to signatories of the Non-Proliferation Treaty (NPT), a newspaper said on Wednesday.

Foreign Minister Alexander Downer convinced cabinet security colleagues a uranium deal with India was in Australia's interest, the Australian newspaper said.

Under the proposed deal, agreed late on Tuesday night, Australian nuclear inspectors would be allowed to check that uranium was used only for peaceful purposes and ensure none was diverted for nuclear weapons programmes, the paper said.

Prime Minister John Howard would contact his Indian counterpart Manmohan Singh to explain the conditions of the proposed export deal before officially announcing the agreement.

Australia has 40 percent of the world's known reserves of uranium and is a major exporter of the material. India has been lobbying Canberra for access to it after an India-U.S. nuclear deal was agreed in principle two years ago.

Downer told colleagues from the National Security Committee of federal cabinet that Australian nuclear inspectors would check the "chain of supply" of nuclear material from Australia to energy-hungry India and its 14 civilian nuclear power plants.

Howard, who faces an election within months, flagged the policy shift in March, calling India a "very responsible country" with which Canberra's relations were growing.

Australia exports uranium to 36 countries, but only sells to countries that have signed the NPT, and only when Canberra has a separate safeguards agreement over the use of the uranium.

Australia and China, an NPT signatory, are finalising safeguards arrangements for uranium sales.