Taiwan has placed a local company on a watch list after the firm sold specialised equipment to Iran, an official said on Wednesday.

"The company is on an observation list, which means it must obtain prior export permits, after it imported 108 pressure sensors from Europe and sold them to Iran in March 2008," said an official at the Bureau of Foreign Trade.

Pressure sensors can measure altitudes and are therefore used in aircraft and rockets.

The official, who declined to identify the company, stressed that the device is neither high-tech nor restricted, rejecting media reports that it could be used to make nuclear weapons.

Britain's Daily Telegraph newspaper reported last month that Iran had tried unsuccessfully to buy the device for more than a year from European and American firms before turning to a Taiwanese company.

UN officials are investigating whether the European companies conducted proper checks of end-user certificates for the equipment, the paper said.

The international community has warned Iran to stop construction of its second uranium enrichment plant, wary that it is trying to develop a nuclear bomb.

Iran rejects the charges and says it wants to build up a civil energy programme.