"These accusations are baseless and, as we have said before, our ballistic technology is only based on our own capacities and scientists," foreign ministry spokesman Hamid Reza Asefi told reporters.

Last thursday, Japanese police arrested the president and four employees of a Tokyo manufacturing company, Seishin Enterprise Co. Ltd, on suspicion of illegally exporting to Iran equipment that could be used to develop solid fuel for missiles.

But while Asefi said technology from Japan had been imported, he insisted that it was not for military purposes.

"Our cooperation with Japanese companies is within the laws of each country, and the said imports were for the manufacture of electrical goods by some businesses, some of which are linked to the defence ministry," said Asefi.

"But you can find these electrical appliances on the domestic market, and they are even exported. And furthermore, they are good quality," he added.

Seishin Enterprise is suspected of shipping two jet-mill grinders in 1999 and 2000 to military-related institutions "without government authorisation," a Japanese police spokesman said.

The machines had been sold for "several tens of millions of yen," he said, while the Jiji Press news agency set the price at some 54 million yendollars).

The jet mill uses compressed air to grind solid materials, such as medicines or printer toner ink, into fine powder, and can also be used to increase the burn efficiency of solid rocket fuel.

It is on the list of restricted items of the Missile Technology Control Regime, an international mechanism to curb exports of missiles as well as missile-linked equipment and technologies.

The MTCR particularly enforces tight controls on exports to Iran, Iraq, North Korea and Libya.

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