VIENNA - The U.N. nuclear watchdog has failed to use all its powers or to beef them up if inspectors are obstructed, leaving the Non-Proliferation Treaty (NPT) in tatters, a former top agency official says.

The International Atomic Energy Agency seeks to catch covert diversions of nuclear energy into bomb-making and foster peaceful uses of the atom. Exposure of suspect nuclear activity in North Korea, Libya, Iran and Syria over the past decade has shaken the Vienna-based watchdog.

The (nuclear) non-proliferation regime is increasingly challenged by states that exploit ambiguity in rules and rifts in the international community to pursue nuclear weapons capabilities without fear of reprisal, said Pierre Goldschmidt, who was global head of IAEA inspections in 1999-2005.

Lax and inconsistent compliance practices threaten non-proliferation efforts by giving some states more leeway for evading rules than should be tolerable in an effective non-proliferation regime, he wrote in a paper for the Carnegie Endowment for International Peace think-tank.

Goldschmidt said the IAEA was not fully applying the verification authority it already had. Moreover, he said, its 35-nation governing body could not agree on how to beef up such powers when obstructed by states under investigation.

To deter would-be proliferators, states had to fear that any secret bomb project was likely to be caught early and penalties -- condemnation by IAEA governors and possibly referral to the U.N. Security Council -- was not just possible but unavoidable.

Unfortunately neither of these two deterrents is credibly in place today, said Goldschmidt, who is Belgian. As a result, the 39-year-old NPT had been eroded to the point of collapse.

U.S. President Barack Obama says there must be real and immediate consequences for those caught flouting the NPT and he wants a significant boost in the budget for IAEA inspections.

SPECIAL INSPECTIONS

Goldschmidt said the IAEA should reassert a right to impose mandatory special inspections in countries refusing to grant broad access to inspectors to resolve intelligence reports of stealthy work to weaponize nuclear materials.

He cited Syria, where inspectors last June found significant uranium traces at a spot alleged by Washington to have been a nascent plutonium-producing reactor before Israel bombed the target to rubble in 2007.

Syria denies the accusations but has also denied IAEA requests for a second visit to the site and to three others, as well as a look at debris from the bombing.

Goldschmidt said the IAEA had not applied a clause in Syria's nuclear safeguards agreement saying the agency could resort to a special inspection, allowing short-notice searches anywhere, if information provided by a country was not deemed adequate for the agency to fulfill its responsibilities.

He suggested the IAEA looked hapless in repeatedly urging a state to voluntarily open up in response to repeated refusals, as it has been doing with Syria, as well as with Iran.

If the only consequence is that the (IAEA) director-general reports at each Board meeting that no progress had been made, this will encourage any non-compliant state to adopt similar obstructive tactics, said Goldschmidt.

He urged IAEA governors to temporarily broaden verification powers to get around invocations of national security used by Syria and Iran to keep military sites in question off limits.

He said they should also require states to provide annual information on past and planned acquisitions of nuclear material and equipment. Nuclear material smugglers helped Iran launch its atomic program. Iran says it wants nuclear energy, not bombs.

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