Bruce Simpson said the firm was linked to the aerospace and missile industries, and was one of a number of enquiries from several countries including Pakistan, China and Lebanon.

But after "worrying about the bigger picture" and turning down the offers, the cash-strapped engineer found himself backrupted by the Inland Revenue Department for non-payment of taxes.

The Iranians made "very serious inquiries about investing in the development of the X-jet technology", Simpson said on his website aardvark.co.nz.

"I have since had emails from Pakistan, Lebanon, China and other countries, all of which sought to obtain details of the X-jet project and some of which have involved seemingly genuine offers of not insignificant payment for such information."

Simpson said he contacted the New Zealand Security Intelligence Service who advised it was "certainly not sensible" to export such technology.

Instead he signed a heads of agreement with a United States firm that would have set up a research and development plant in Waikato, south of here.

But the deal was scuttled last Monday when he was bankrupted.

A bitter Simpson said Inland Revenue was stupid to quash a deal that would have reaped cash "hundreds of times the value of the outstanding debt".

The 49-year-old engineer, website developer and software technician worked within a budget of 5,000 US dollars to build and perfect his do-it-yourself cruise missile.

The "X-Jet" is similar to the pulse-jets that powered Germany's V-1 missiles in World War II, and the GPS guided missile has a range of 160 kilometres (100 miles) with a 10 kilogram (22 pound) warhead.

Simpson said he acquired most of the parts from the online auction house eBay, including a GPS system purchased for 120 US dollars that "was delivered by international airmail in less than a week and passed through customs without any problems."

The missile was no longer in his possession, and its whereabouts would be kept secret "until an appropriate time", he said.

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