But the deputy head of Iran's Atomic Energy Organisation, Mohammad Saeedi, denied allegations by Russian company Atomstroiexport that financing from Iran for the Bushehr plant had been frozen since last month.

Russia said on Tuesday it may delay delivering nuclear fuel for the reactor if the payment problems continue amid international concern about Iran's continued defiance over its nuclear programme.

Under a deal agreed last September, Russia was to deliver fuel to Iran in March, the power station would begin working in September and it was to start producing energy in November.

But Russia warned this week that the start date could be postponed again.

Of the Atomstroiexport claims that Tehran had frozen payments, Saeedi said: "Iran has paid the contractor beyond its commitment in the contract.

"The contractor company lacks the required funds to release equipment from the manufacturer and has asked Iran to help in this regard," Saeedi told the state news agency IRNA.

"Iran will cover part of the expenses so that the manufactured equipment is transferred to Iran soon."

Atomstroiexport on Wednesday demanded that Iran sign an "amendment" to the contract to resolve payment differences. The company is due to receive an Iranian delegation this month in a bid to resolve the difficulties.

The United States, which accused Iran of seeking nuclear weapons, has urged Russia to suspend construction. Tehran insists its nuclear programme is only aimed at civilian energy generation.

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