"I think that the issue is over emphasized by some media. ... The issue is not so sensitive," foreign ministry spokesman Liu Jianchao said.

Liu said China is consulting with German engineering giant Siemens on purchasing a plutonium facility and equipment used to produce MOX, a fuel for nuclear power plants.

Liu said MOX has shown great potential in increasing the economic benefits of nuclear power stations and is used in more than 30 light-water reactors and over 20 fast neutron reactor nuclear power stations in France, the United States and Japan.

"This will be used for peaceful purposes," Liu said during a regular briefing.

The plant at Hanau, western Germany, was built by Siemens in 1991 but never went into production, although the technical equipment remains on site.

It is estimated to be worth about 50 million euros today, although Siemens would not comment on the figure.

The sale of the plutonium plant has stimulated political opposition in Germany with the Greens party, partners in German Chancellor Gerhard Schroeder's ruling coalition, calling the proposed sale "politically unwise."

WAR.WIRE