The hardline stance -- seen as hitting out at world powers led by Washington -- came after the conservative-dominated parliament urged the government to reduce ties with the UN atomic watchdog which on Friday condemned Iran for building its second uranium enrichment plant.

State television reported on its website that Ahmadinejad's cabinet overwhelmingly ordered Iran's atomic body to begin building at five new sites earmarked for uranium enrichment plants and to locate sites for another five over the next two months.

The report said the Islamic republic wants to have nuclear power capacity of 20,000 megawatts, with fuel to be supplied by the building of another 10 uranium enrichment plants the size of the one in the central city of Natanz.

"In order to produce 20,000 megawatts we need 500,000 centrifuges with the current capacity. But we have designed new centrifuges which have higher capacity, so we would require less centrifuges and as soon as they become operational we will use them," Ahmadinejad was quoted as saying.

"We have to reach the level to be able to produce between 250 and 300 tonnes of fuel per year in the country, and for this we need newer centrifuges with a higher speed."

Iran is already under three sets of UN sanctions for defiantly enriching uranium -- the most controversial aspect of its nuclear programme -- at the Natanz facility.

Tehran further infuriated world powers in September when it disclosed it is building a second enrichment plant near the Shiite holy city of Qom.

On Friday, the International Atomic Energy Agency (IAEA) condemned Iran for building the Qom plant and asked for its construction to stop.

Angry Iranian MPs demanded that Ahmadinejad's government reduce ties with the IAEA following the resolution, seen as "political and lacking consensus."

"The Iranian nation without a doubt knows that legally its nuclear file has no flaws," the MPs said, and urged the government to continue its nuclear programme "without any halt."

The IAEA resolution saw China and Russia, which have close links with Tehran, join Britain, France, Germany and the United States in condemning Iran over the Qom plant, being built inside a mountain.

Twenty-five nations on the 35-member IAEA board voted for the censure, which refers the case to the Security Council and was the first against Iran since February 2006.

Ali Akbar Salehi, Iranian vice-president and the head of the nation's atomic organisation, said moments after ISNA news agency broke the news that his team will implement the decree.

"The decision taken today (by the government) is a firm reply to the indecent move by the five-plus-one in the latest IAEA meeting," he said, referring to the P5+1 group comprising the permanent members of the UN Security Council plus Germany.

"10 new enrichments sites will be built. We are as much committed to our rights as we are to our international obligations," Salehi was quoted as saying by ISNA.

Western powers have long suspected that Iran, despite its fierce denials, is trying to build a nuclear bomb but in the past they have struggled to win diplomatic backing from China and Russia.

World powers object to Tehran's uranium enrichment work. Enriched uranium can be used to power nuclear reactors, but in highly purified form it can make the fissile core of an atom bomb.

World powers are also irked at Tehran for refusing a high-profile nuclear fuel deal brokered by the IAEA.

That deal envisages shipping abroad Iran's low-enriched uranium (LEU) -- which the West fears could be diverted for making atomic weapons -- for conversion into 20 percent enriched uranium to fuel a medical research reactor in Tehran.

Iran insists it is ready to send its LEU abroad only if there is a simultaneous exchange of fuel inside the country.

Ahmadinejad said on Sunday that Iran could start enriching uranium to the 20 percent level on its own.

"We will study producing enriched uranium up to the 20 percent purity at Wednesday's meeting of the cabinet. We have cordially approached to the world but we will not allow an inch of our nation's right to be wasted," he said.

Ali Larijani, the Islamic republic's parliament speaker, warned that the country could "seriously decrease" cooperation with the IAEA.

The Obama administration has advocated a policy of dialogue with Tehran but has also not ruled out new sanctions against it.

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