India's government hailed as "historic" a decision Saturday by nuclear supplier nations to end the country's nuclear pariah status and adopt a US initiative to allow atomic trade with New Delhi.

The 45-member Nuclear Suppliers Group, meeting in Vienna, agreed to end the 34-year-old ban on nuclear trade with India after Washington sought a waiver so it could share civilian nuclear technology with New Delhi.

The decision, clearing the way for finally sealing the US-India nuclear pact, "marks the end of India's decades-long isolation from the nuclear mainstream," said Prime Minister Manmohan Singh, who had risked his Congress-led government's future on the deal.

"It is a recognition of India's impeccable non-proliferation credentials and its status as a state with advanced nuclear technology. It will give an impetus to India's pursuit of environmentally sustainable economic growth," he said.

In a separate statement, the White House said US President George W. Bush and Singh had spoken by telephone and welcomed the "historic achievement."

Earlier, Indian foreign minister Pranab Mukherjee said the waiver would "open a new chapter in India's cooperation with other countries" in promoting the "peaceful use of nuclear energy."

Outside the headquarters of the ruling Congress party in the centre of the Indian capital, supporters danced in celebration.

"It's a historic day for the country," Digvijay Singh, a senior Congress lawmaker, told reporters.

"The world has accepted the credibility of this country, that we are serious as far as nuclear non-proliferation," he said, adding the pact would go a "long way towards bridging the gap between energy supply and demand in this country."

The landmark deal -- first agreed between Singh and Bush in 2005 -- has stirred huge controversy in India.

Both the main opposition Hindu nationalist Bharatiya Janata Party and the communists, who withdrew their support from the government over the agreement, have said it would bring India's foreign policy too much under US influence and curb its military strategic actions.

"India has walked into the non-proliferation trap set by the US, we have given up our right to test nuclear weapons forever, it has been surrendered by the government," senior BJP leader Yashwant Sinha said.

"It's not in our country's interest," echoed veteran communist leader D. Raja.

Singh, who in July won a tightly fought confidence vote in parliament that was seen as a mandate to proceed with the pact, repeatedly defended it as vital for energy security and to end India's nuclear isolation.

Washington was keen to get the deal through so the US Congress could ratify it before adjourning at the end of September for the November presidential elections.

The agreement is one of the key foreign policy initiatives of Bush as well as of Singh, whose Congress party faces general elections by May 2009.

Energy-hungry India has been denied access to civilian nuclear technology since it first tested a nuclear weapon in the 1970s and refused to sign the Nuclear Non-proliferation Treaty.

The oil-import dependent nation is seeking to broaden its fuel sources to sustain its fast-growing economy. Nuclear power supplies around three percent of India's fuel needs but it aims to hike this to 25 percent by mid-century.