TEHRAN - Iran plans to use a new generation of faster centrifuges to enrich uranium at a newly-revealed nuclear site, its atomic energy chief said in remarks published on Tuesday.

The underground enrichment plant near the holy Shi'ite city of Qom was kept secret until Iran disclosed its existence last month. Diplomats say it did so after learning Western intelligence services had discovered the site.

In Geneva on October 1 Iran agreed with six world powers -- the United States, Russia, China, Britain, France and Germany -- to allow U.N. International Atomic Energy Agency (IAEA) inspectors access to the site. Follow-up talks are due in late October.

We have put our effort on research and development of new machines in the past two or three months so that we would be able to produce machines with high efficiency and completely indigenous, Ali Akbar Salehi, the head of Iran's Atomic Energy Organization, was quoted as saying by the newspaper Kayhan on Tuesday.

We are hopeful of using a new generation of centrifuges at the (Qom-area) Fordu site, he said. Kayhan published a transcript of a state television interview with Salehi.

Nuclear experts believe the new model of centrifuge is capable of doubling or tripling the output rate.

IAEA director Mohammed ElBaradei secured a deal with Iran on Sunday to let inspectors visit it on October 25. The plant under construction would be Iran's second uranium-enrichment site, after a larger one under IAEA surveillance near Natanz.

The West suspects the Islamic state is covertly seeking to develop nuclear weapons. Iran denies this but has refused to curb the program or allow unfettered IAEA inspections needed to verify it is for peaceful purposes only.

Last Thursday's talks are expected to win Iran a reprieve from tougher U.N. sanctions in the near future.

TRANSPARENCY PLEDGES

However, the prospect could arise again if Iran does not, in coming talks, go beyond the limited nuclear transparency pledges agreed in Geneva and instead tries to string out dialogue to buy time to develop possible atomic bomb capability.

Enriched uranium can be used to fuel nuclear power plants and, if refined much further, provide material for atomic bombs.

Iran has said the new enrichment site, which has space for 3,000 centrifuges, is about 18 months away from going on line.

Last month, Salehi said Iran had built a new generation of centrifuges and was testing them, adding they were stronger and faster than the 1970s-vintage P-1 deployed in Natanz.

Western diplomats said Iran agreed in principle in Geneva to send about 80 percent of its stockpile of low-enriched uranium to Russia and France for further processing and return to Tehran to replenish rapidly dwindling fuel stocks for a reactor that produces isotopes for cancer care.

Some experts said the non-proliferation purpose of this deal -- reducing Iran's accumulation of enriched uranium that could possibly be diverted for weaponisation -- would mean little if Iran accelerated its enrichment rate with advanced centrifuges, and without a cap on the program as a whole.

We have to be wary of other activities that could discount the positive potential of the uranium (processing deal), a senior European diplomat said, alluding to the centrifuge plan.

David Albright, head of the Washington-based Institute for Science and International Security which tracks nuclear proliferation, said: At best, the proposal to remove the LEU (low-enriched uranium) is a temporary measure that becomes meaningless unless Iran suspends its enrichment program.

World powers at the next round of talks aim to press Iran for a freeze on expansion of enrichment as an interim step toward a suspension that would bring it major trade rewards.

(Additional reporting by Mark Heinrich in Vienna; Writing by Fredrik Dahl; Editing by Andrew Dobbie)

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