The decommissioned K-159 sub sank at 4:00 am (0000 GMT) three miles (five kilometres) off Kildin island in the Barents sea, northwest Russia, after a pontoon with which it was being towed to port broke away in a storm, Northern Fleet spokesman Igor Babenko said.

Of the 10 crew members, one was saved, two were found dead and seven are as yet unaccounted for, Babenko said.

However Defence Minister Sergei Ivanov, arriving here at this northwestern naval base, said the missing men were officially regarded as dead, the Interfax news agency reported.

"We have unfortunately to admit what the seamen have told us -- that it will be impossible to find any of the seven missing men alive," he said.

Defence ministry officials in Moscow said the 40-year-old submarine's nuclear reactor had been neutralised before the vessel went down, that the sub was not carrying any weapons, and that there was no danger of pollution.

President Vladimir Putin, holidaying in Sardinia where he is the guest of Italian Prime Minister Silvio Berlusconi, described the sinking as a tragedy that showed the need for increased service discipline.

Berlusconi, speaking at a joint press conference in Sardinia, expressed Italy's condolences for the accident.

The commander of the Northern Fleet, Admiral Vladimir Kuroyedov, arrived in the area of the sinking aboard the cruiser Peter the Great to supervise rescue operations and was due later to travel to Severomorsk to meet Ivanov.

Sunday was declared a day of official mourning in northwest Russia, the Russian news agencies reported.

The accident comes two weeks after Russia marked the three-year anniversary of the sinking of the Kursk nuclear submarine which went down in the Barents Sea on August 12, 2000, killing all 118 crew members, after a fuel leak from a torpedo caused an explosion.

Reports of the K-159 sinking evoked bitter memories of the Kursk disaster in which the government and naval commanders were accused of reacting too slowly and of turning down offers of assistance from Western powers at a time when it was believed some of the stricken seamen could be saved.

The sinking of the Kursk was regarded as a national tragedy, triggering a political crisis for the government, lashed by public opinion and opposition politicians for its perfunctory and late reaction to the disaster.

The K-159, decommissioned in 1989, was being towed to the scrapyard at the time of the accident.

A pontoon broke away and then violently struck the hull of the submarine, causing an inrush of seawater, Babenko said.

The senior officer then gave the order to evacuate the vessel, he said.

It was not yet possible to determine the whereabouts of the missing seamen, "but they do not seem to be in the submarine," the spokesman said.

Naval officials in the region said the level of radioactivity in the waters near the submarine, lying on the seabed at a depth of 170 metres (550 feet), "are normal."

The Norwegian Radiation Protection Authority in Oslo said the sinking presented no radiation threat to the environment, but a spokesman for the Oslo-based environmental protection group Bellona was more doubtful.

"We cannot yet evaluate the ecological consequences of the disaster, and there are several negative factors, including the fact that there is no confirmed information about the state of the reactor or on whether the sub was still carrying spent nuclear fuel," the organisation's local representative Sergei Zhavoronkin told AFP.

An inquiry has been opened into the sinking, and senior military prosecutor Alexander Savenkov has issued charges against naval officers for violations of navigational instructions, the Interfax news agency reported.

Ivanov late Saturday dismissed from his command the officer who supervised the towing of submarines in the region, including that of the K-159, Captain Sergei Zhemchuzhny, the ITAR-TASS news agency reported.

The defence minister said the submarine would be raised from the bottom of the Barents sea, although he failed to mention a date.

The state would offer financial assistance to the families of the K-159's dead crew, Ivanov added.

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