According to a report to appear in Monday's weekly Der Speigel magazine, Foreign Minister Joschka Fischer, who is the head of the Green Party in the ruling coalition, had warned Schroeder the Greens would not accept the sale.

Schroeder had announced the controversial deal between Beijing and electronics giant Siemens during a trip to China in December.

Beijing also offered guarantees that the facility would only be for civilian use, dismissing concerns the facility could be used to develop weapons.

Spiegel said the decision to reject the sale had been made internally to avoid a crisis within the coalition between Schroeder's Social Democrats and its junior partner, the Greens.

A German government spokesman however said "no decision has yet been taken" and that the government "was continuing to study the sale."

The plutonium 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 has never commented on the figure.

China's nuclear power industry, although only providing a small percentage of its overall energy, is expected to be one of the world's fastest growing in the coming years.

WAR.WIRE