PM says U.S. nuclear deal delayed, not dead

By Y.P. Rajesh

NEW DELHI (Reuters) - Prime Minister Manmohan Singh said on Tuesday that a landmark but controversial nuclear energy deal with the United States had been delayed due to domestic opposition but was not dead.

His comments, following sustained U.S. pressure to push the historic deal, were the clearest in recent weeks over the fate of a pact many analysts say is close to collapse.

It aims to give India access to American nuclear fuel and equipment, reversing a three-decade ban, but has been opposed by Singh's communist allies who say it draws New Delhi into Washington's strategic embrace.

The deal has also been criticised by the non-proliferation lobby which says Washington was unfairly rewarding India, which has tested nuclear weapons and not signed the Non-Proliferation Treaty (NPT), sparking fears of a nuclear arms race in Asia.

The communists have threatened to end support to his coalition if the government pursues the agreement, forcing Singh to signal that he was pausing a deal that has been seen as the centrepiece of growing strategic ties between the two countries.

"There is some delay but we have not reached the end of the road," Singh said at a joint news conference with visiting German Chancellor Angela Merkel.

"We have run into some problems ... which we are trying to resolve," Singh said. "We remain committed that this process is carried forward."

India was a democracy and his government needed to take its supporters along with it, Singh said. He did not want to speculate what would happen if a consensus could not be found.