The newspaper, which hinted that Chirac could announce the policy changes in the coming weeks, quoted an unidentified senior military official as saying that the policy shifts would be "definitively finalized" by early next year.

Chirac's office however denied any change in France's policy since a June 2001 speech in which the president outlined the country's strategic doctrine for the 21st century, endorsing the theory of nuclear deterrence.

In that address, Chirac said the theory, under which atomic weapons ensure peace by the threat of devastating retaliation, allowed France "to face threats which might be brought to bear on our vital interests from regional powers armed with weapons of mass destruction" -- taken to mean rogue states.

He sternly warned: "If they are driven by hostile intentions towards us, the leaders of such states must know that they would expose themselves to harm that they would find totally unacceptable."

At the time, Chirac called for the development of a diverse arsenal and broader European defense cooperation to counter new threats.

But on Monday, Liberation reported that Paris was preparing to redefine its policy of nuclear deterrence vis-a-vis rogue states that could launch chemical or biological weapons attacks against France or French interests.

It said the new policy also would "take into account the threat from China, qualified as a 'remote possible scenario'."

Since 2001, France has invested heavily in its nuclear arsenal to counter such threats "with the development of new missiles and warheads," the paper reported, citing the figure of 17 billion euros (20 billion dollars) over six years.

About 20 percent of France's spending on military hardware is devoted to its nuclear deterrence capability, according to Liberation.

On the cards are a fourth new generation missile-launching submarine, an M51 ballistic missile that can reach as far as Asia, an improved medium-range missile launched from fighter jets and a program of simulated test launches, it said.

France became a nuclear power in 1960 under then president Charles de Gaulle, making it at the time one of five recognized nuclear powers, along with Britain, China, Russia and the United States.

Since then, India and Pakistan have joined the nuclear club, and Israel has neither confirmed nor denied possessing nuclear weapons.

Chirac put an end to France's nuclear testing in January 1996, less than one year after taking over the presidency, after widespread protests over a series of tests in the South Pacific.

WAR.WIRE