"This new agreement will allow the supply of Australian uranium for use in Russia's civil nuclear power industry and provide a framework for broader cooperation on peaceful nuclear-related activities," Howard said.

Speaking at a joint press conference with Putin, Howard moved to allay fears that sales of yellowcake, set to be used in domestic Russian civilian reactors, would pose a potential nuclear risk.

While Australia could reportedly begin exporting its yellowcake to Russia as early as next year, the agreement means Russia would not be allowed to sell the fuel to any other nation or use it for military purposes.

"Any uranium that is sold to Russia will be sold under very strict safeguards," Howard said after meeting the Russian leader in Sydney, where both will attend a weekend Asia Pacific summit.

Howard dismissed claims that Australian uranium could be sold on to third nations, fuelling nuclear proliferation and possibly falling into the wrong hands.

"My attitude to the assessment is that they are wrong," he said.

Putin, who earlier Friday became the first ever Russian or Soviet head of state to come down under, also dismissed fears that Russia would sell on Australian uranium.

He said Russia already exports large quantities of enriched uranium for military use, including 30 tonnes a year to the United States, so Moscow had no need to sell Australian yellowcake.

"I simply don't understand what people are talking about," he told reporters. "We are buying uranium from Australia for purely economic reasons."

But environmentalists said Australia could be helping fuel nuclear proliferation.

Greenpeace Australia chief executive Steve Shallhorn said Russia's nuclear power industry was unsafe and the country had not ratified international agreements separating its military and civil nuclear programs.

He said if Russia was able to use Australian uranium in its nuclear power plants, it could use its own uranium deposits for other purposes, including weapons production and exports.

"The primary danger is that by supplying Australian uranium to Russia nuclear plants, it frees up Russia to do whatever it pleases with its own deposits," he said.

Shallhorn said Russia had huge stockpiles of nuclear waste which were poorly secured and could potentially be stolen for use in dirty bombs. It had helped build a nuclear power plant in Iran and agreed to supply it with uranium.

"It underscores the problem that Russia is a proliferator of nuclear technology," he said.

Australia, which has the world's largest known deposits of uranium, in January ratified an agreement with China for the export of yellowcake for Beijing's growing nuclear energy programme.

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