Moscow has delayed the start-up of Iran's first nuclear power station to 2008 because Tehran has fallen behind with payments for the Bushehr plant, a top Russian official said on Thursday.

The timing of the plant's start-up is significant as it is viewed by Israel and the United States as an important element in a nuclear drive which they suspect is a front for developing nuclear weapons. Iran says the program is entirely peaceful.

Russia has repeatedly delayed the plant which under the latest schedule was due to be started up in September 2007. A Russian sub-contractor said on Wednesday the plant, in southwest Iran, had no chance of being launched before autumn 2008.

Russian Deputy Foreign Minister Sergei Kislyak said in Baku that Tehran was still behind in payments for the plant and that the delay was not political.

It will clearly not be possible to start-up the atomic station this year so it will be moved to the next year, Kislyak told reporters, citing the payment problems.

We are fully determined to take Bushehr to its logical conclusion and launch the atomic power station, he said.

The Itar-Tass news agency earlier reported Kislyak had said Bushehr would be inaugurated in early 2008.

PAYMENT PROBLEMS?

Moscow says there is no evidence that Tehran has the capability to make nuclear weapons, but ties have been strained by what Russian officials say are millions of dollars in missed payments for the station.

Iranian officials say they have made the proper payments and that Moscow is delaying due to pressure from the West.

Kislyak said payment delays had forced Russian firms to work on credit although he declined to say how much Iran owed Russian companies for the station.

Iran should pay Russian firms about $25 million a month for the $1 billion, 1-GW plant, the first of what Iran has said will be a network of reactors generating 20-GW of electricity.

Russian nuclear officials say that nuclear fuel would have to be sent to Bushehr, a project initiated by Iran in the 1970s, at least six months before the reactors start.

Russia has traditionally been seen as Tehran's closest big-power ally but the delays to Bushehr have chilled relations.

Analysts have speculated that Moscow could be tweaking its policy towards Tehran or that the Kremlin is using Bushehr as a bargaining chip in a wider diplomatic game.

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