Australia has decided to sell uranium to India on the condition that its inspectors be allowed to check on site that the yellowcake is used only for peaceful purposes.

The National Security Committee of the Federal Cabinet agreed on Tuesday night to allow the uranium shipments to India, despite it not signing the Nuclear Non-Proliferation Treaty, The Australian reported.

Foreign Minister Alexander Downer, speaking to a local TV channel late on Tuesday, however, said uranium sales to India are a fair way off, and would need to pass a number of hurdles before they could occur.

Downer, declining to elaborate on the committee's discussions, said, "If we're ever to sell uranium to India, it's a bit down the track."

If any deal were to be struck, it will be some time off, with a nuclear safeguards agreement to be negotiated to ensure that uranium would only go to civilian reactors that were subjected to an international inspections regime, he said.

The newspaper said Australian nuclear safety inspectors will check the "chain of supply" of nuclear material from Australia to India to ensure none was siphoned off into weapons programmes.

Australian Prime Minister John Howard will personally contact his Indian counterpart Manmohan Singh [Images] as soon as possible to explain the conditions before formally announcing the agreement, the report said.