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Iran on Friday denied a recent report in the German weekly magazine Der Spiegel which alleged Tehran had a secret fund to finance its nuclear activities, the official IRNA news agency reported.

Developing Iran's peaceful nuclear program does not require the approval of a secret budget, the Embassy of the Islamic Republic of Iran in Berlin said in a statement.

All of Iran's nuclear activities are under the supervision of the International Atomic Energy Agency (IAEA) and there have been no references about secret activities in IAEA reports, the statement said.

"On the issue of the construction of a new nuclear power plant, we state that there is no need for secrecy since the IAEA is supporting the rights of countries to use peaceful nuclear energy," it said.

Furthermore, if Iran would want to undertake such steps, it could announce and act openly, the statement added.

Der Spiegel, citing information from telephone calls of a top Iranian official on a line tapped by a Western intelligence service, reported on Monday that Iran may have set aside a secret fund of 418 million U.S. dollars for its nuclear operations.

The money would be used to upgrade the defense of Iranian nuclear facilities around the country, especially for tunneling projects because Iran's leadership fears a U.S. or Israeli surprise attack, the German magazine reported.

Other intended uses for the fund are the production of dozens of new centrifuges for uranium enrichment and the construction of a secret new nuclear plant at an unknown location, the report said.

The United States has been seeking to impose sanctions on Iran through the UN Security Council on the grounds that Tehran is developing a nuclear-weapon program under the guise of a civilian-use program.

Iran has insisted that its nuclear program is for peaceful purposes and voiced hope for talks on the nuclear standoff. But the Islamic Republic rejected a prerequisite of suspending nuclear work for such talks.

(Xinhua News Agency November 18, 2006)