Paris, March 31, 2005 (Reuters)

Iran allocated $2.5 billion to obtain three nuclear warheads last year, an exiled Opposition group has said, without saying whether Iran had secured any of the warheads.

The group, which has given accurate information in the past on some of Iran's nuclear facilities, also said Iran was speeding up work on a reactor south of Tehran which could produce enough plutonium for an atomic bomb by 2007.

Iran says its nuclear programme will be used only to generate electricity. But Washington and European countries fear Iran could use its nuclear plants to produce bombs.

The National Council of Resistance of Iran (NCRI), an exile group that wants to oust Iran's clerical rulers, said Iran's supreme leader Ayatollah Ali Khamenei had told defence minister to take steps to obtain nuclear warheads. "In mid-2004, Khamenei allocated $2.5 billion to obtain three nuclear warheads," Mohammad Mohaddessin of the NCRI told a press conference in Paris.