Canadian officials have begun researching whether and what kind of foreign purchases of Nortel Networks assets might be subject to government restrictions, Industry Minister Tony Clement said on Thursday.

He told Reuters he was not allowed to review purchases under the Investment Canada Act before there is an agreement, but he has directed his officials to examine what could be subject to the act.

I can't review anything until there is an agreement of purchase and sale, so that's not germane right now because there's still an auction going on, he said.

Nortel's wireless assets go up for auction on Friday, and at least three foreign bids, ranging from $650 million through $730 million, are on the table.

Nokia Siemens Networks -- a joint venture of Nokia and Siemens -- kicked off the bidding last month, and the private equity firm MatlinPatterson and Sweden's Ericsson have also put in bids.

Nortel filed for bankruptcy protection in January, blaming the economic crisis for derailing a turnaround effort that began in 2005.

Canada's opposition New Democratic Party said in a statement Clement was obliged to examine foreign takeovers above a certain size to see if they were of net benefit to Canada.

Clement said he would welcome a Canadian bid for Nortel assets, and he encouraged Blackberry maker RIM last December to make a bid before Nortel entered bankruptcy protection.

We would welcome a viable Canadian bid or Canadian participation in a bid, he said.

RIM has expressed an interest this week but has run into obstacles. However, Clement said he had seen reports suggesting the company might team up with one of the bidders. I don't think it's over yet, he commented.

But Clement said he was not able to intervene on RIM's behalf if it had procedural complaints about the bidding process, as that was up to the bankruptcy judge supervising Nortel.

Explaining why Ottawa had not come to Nortel's aid, while it did join the United States in rescuing the auto industry, he said: Nortel didn't have a viable business plan. (Reporting by Randall Palmer; Editing by Lincoln Feast)

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