The sale led to the resignation of a Belgian minister in August, and has been called into question again after the cancellation of elections and the October 4 sacking of prime minister Sher Bahadur Deuba by Nepal's King Gyanendra.

But Michel said a report into the political situation in Nepal, where a bloody Maoist rebellion has raged since 1996, had cleared the way for the sale.

"On the basis of the report there is no reason to suspend the export licence," he told the Belgian parliament's foreign affairs committee.

The report was compiled by a mission headed by former Belgian ambassador to Beijing Johan Maricou, which returned to Brussels on Monday.

The report "does not change the analysis of the situation," said Michel's spokesman Didier Seeuws. "The report specifies that the cancellation of the elections in Nepal was due to the Maoists."

Belgian Prime Minister Guy Verhofstadt survived a vote of confidence over the issue at the end of August, after Health and Environment Minister Magda Aelvoet resigned.

Critics say the sale is illegal under a law banning arms exports to countries engaged in civil war.

Verhofstadt justified it by saying that Nepal was a young democracy which had to be helped.

Nepal's Maoist insurgency has claimed some 4,300 lives.

King Gyanendra this month suspended parliamentary polls which had been due to open November 13. He has not announced new dates.

SPACE.WIRE