"It is most unfortunate that these things (transfer of nuclear technology) happened due to the peculiar nature of the circumstances and loose arrangements in those early days and because of the personal obligations of previous governments to these countries," says the undated ISI report obtained and released by the Fox News today.

The ISI report, Fox News said, was based on the questioning of A Q Khan and others by the Pakistani spy agency. The report was circulated to western intelligence agencies after Pakistan refused to produce Khan for questioning, the news channel said.

However, the report has no reference to North Korea, which the western countries say was also a recipient of the clandestine nuclear technology from Pakistan.

In the report, the ISI also conceded that Pakistan used every legal and illegal means to obtain nuclear technology and establish the plant to make atomic weapons in the country.
"When the (atomic research) organisation was set up in mid 1976, a free hand was given to the Project Director to acquire each and everything through any means," it said.

"There was a direct and imminent threat to Pakistan's security and existence in the wake of the dismemberment of the country in 1971 and after the Indian nuclear test in 1974," it said.

Gen    Ziaul Haq, the then Pakistan President, had openly proclaimed that "beg, borrow or steal" was the policy of the day in the light of the imposition of stringent embargoes and restrictions on any nuclear-related materials and equipment to Pakistan, the ISI said.

Pakistan, being an under-developed country with no industrial infrastructure, had to buy each and every bit of material and piece of equipment surreptitiously from abroad in the open market and had to establish a network of cover companies within the country and outside to by-pass embargoes and import all the necessary items, it said.

Such companies were operating in Kuwait, Bahrain, UAE, Singapore, UK, Germany, Luxembourg, Switzerland etc, the ISI report said.

Since no industrial infrastructure was available within the country, production drawing of all the components of the centrifuge machines were sent to England, France, Germany, Switzerland, Holland etc for the placing of orders for thousands of components and equipment required in order to expedite the work, which was a race against time, it said.

"Dubai, having no customs formalities or restrictions and no financial impediments, was made the main operating centre. All the foreign suppliers (Dutch, British, French, Turkish, Belgian, Swiss, German etc) were regularly coming to Dubai to discuss offers and orders.

"A company named Ben Belilah Enterprises (BBE), owned by an Arab police officer, was introduced by A Salam, a British national," it said.

"BBE had a Sri Lankan Manager named Farooq. Salam and Farooq, both being Tamils, were good friends. Due to the frequent meetings between our experts and the foreign suppliers, sets of almost all the drawings were kept in Dubai in a flat that had been rented especially for this purpose so they wouldn't have to be carried to and fro all the time," the report said.

The ISI said whatever assistance was given to Iran and Libya was done in order to maintain friendly relations with these countries. It was never seriously believed this would lead to anything as they were scientifically and technologically backward countries, unable even to establish a pilot plant of this nature or produce nuclear weapons, ISI argued.

Noting that due to religious and ideological affinity, Pakistanis had great affection for Iran, the ISI said former Pakistani army Chief Gen Aslam Beg was in favour of very close cooperation in the nuclear field in lieu of financial assistance promised to him towards Pakistan's defence budget.

"Benazir Bhutto's government came under a lot of pressure for cooperation and under this pressure and the decision/approval/directive of Gen Imtiaz Ali, Adviser on Defence (including nuclear matters) to the Prime Minister, KRL (Khan Research Laboratories) gave some drawings and components to Iran for R & D work," ISI said.

"The information given was by no means sufficient to enable Iran to establish even a small pilot plant, not to talk of a fully fledged centrifuge plant or produce nuclear weapons. The Iranians already had excellent contacts with European suppliers and they also started importing components and equipment through Dubai (Farooq)," the ISI report said.

"For some time there was close cooperation through Farooq, it said. "The Iranians wanted drawings etc of valves, inverters, control panels, cascades etc from Farooq and they gave him USD 5 million to help them in their efforts to acquire this information.

"Farooq gave some money to Dr Niazi who had arranged the initial contact between him (Farooq) and the Iranians and some he transferred to his own accounts," it said. Part of the money was put in an account in the fictitious name of Haider Zaman, which first Farooq and later on Tahir, Farooq's nephew, and A Q Khan could operate, the report said.

"This account was opened personally by Farooq. Some of the money from this account was used by Tahir for payments etc and some was donated for various social, educational and welfare projects undertaken by Dr    A Q Khan in Pakistan," the report said.

"The Iranians needed some P-1 (early discarded model) components. They approached Tahir to request Farooq, an engineer in KRL, to send them these components. These were old components that were no longer being used by KRL and were not sufficient or adequate for the establishment of a small pilot plant or to produce nuclear weapons," the ISI report said.

"If it is true, but this is highly unlikely, that there were some traces of uranium in the Iranian facilities, there is just the remotest of chance that one or more KRL components inadvertently had traces of UF6 gas on them that had not been properly decontaminated before shipment," it said.