But Linton Brooks, head of the National Nuclear Security Administration, said the University of California that manages Los Alamos National Laboratory will see its fiscal 2004 fee reduced by 5.8 million dollars as punishment for security lapses discovered at the northern New Mexico facility that gave birth to the US nuclear bomb.

"Although multiple investigations have confirmed that the 'missing' disks never existed, the major weaknesses in controlling classified material revealed by this incident are absolutely unacceptable, and the University of California must be held accountable for them," Brooks said in a statement.

"Of even greater concern are significant safety weaknesses which came to light at approximately the same time," he added.

The admission -- and the penalty -- cap one of the biggest security shake-ups the US nuclear weapons industry in post-World War II years that resulted in a temporary shutdown of all US nuclear research facilities last year.

The flap erupted in early July when it was reported that two classified computer zip drives were missing in Los Alamos, a laboratory that was home to supersecret Manhattan Project in 1945 and continues to be actively involved in weapons development.

The discovery came at a sensitive political moment.

With a presidential election campaign in full swing, President George W. Bush faced persistent charges from his Democratic opponent, Senator John Kerry, that his administration was not doing enough to secure the country in the face of a growing threat from terrorists said to be seeking access to loose nuclear weapons and technology.

To avoid the missing disks mushrooming into a political scandal, the administration moved fast and vigorously.

Energy Secretary Spencer Abraham called the situation at Los Alamos "unacceptable" and halted all secret weapons work involving removable hard drives or computer disks until a full inventory of data could be completed.

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