Iran said yesterday that the Russian contractor of its Bushehr nuclear power plant was facing financial problem, but stressed that both sides were still working to finalize the project on schedule, the official IRNA news agency reported.

Gholam-Reza Aqazadeh, head of Iran's Atomic Energy Organization, made the remarks at a joint press conference with his visiting Russian counterpart Sergei Kiriyenko.

Admitting the financial difficulties facing the nuclear power plant project, Aqazadeh still stressed the importance of cooperation between the two sides for the timely implementation of the project.

Moscow is due to complete Iran's long-delayed first nuclear power station in September 2007 and deliver the nuclear fuel by the end of the current Iranian year, which ends on March 20, 2007.

When asked whether the required nuclear fuel could be sent to Iran on time, Aqazadeh said that the schedule had not changed.

For his part, Kiriyenko said that some progress had been made in the implementation of the project, but outspoke that "it is not sufficient".

Iranian and Russian experts were required to further exchange their views in a bid to expedite the project, he added. According to Aqazadeh, the Russian contractor expected Iran to provide financial aid beyond the initial agreement.

In addition to financial difficulties, the failure in the delivery of premade equipment by third-party countries was another problem facing the Bushehr project, Kiriyenko said.

According to Iran's Mehr news agency, Aqazadeh said that Iran had decided to provide assistance beyond previous agreements to Russia in order to solve the technical problems of the power plant.

But Mohammad Saeedi, deputy chief of Iran's Atomic Energy Organization for international and planning affairs, made it clear that "Iran will not pay Russia more than what has been agreed."

Iran only decided to speed up the payments in order to accelerate the construction of the power plant, said Saeedi.

Moreover, "if the third-party countries do not send the equipment required for the power plant, it will be built in Russia and sent to Tehran," Saeedi was quoted as saying.

Iran signed up Russian nuclear industry construction firm Atomstroi export in 1995 to build the Bushehr plant for a contract worth about 1 billion U.S. dollars.

The Russians began building Bushehr in 1998. The Bushehr plant was previously scheduled to become operational by the end of 2006.