The European Union (EU)'s executive arm said negotiations with Japan are continuing on the multi-billion dollar International Thermonuclear Experimental Reactor (ITER) project, with the aim of reaching an agreement by July.

"For the moment there is no change for us," said a commission spokeswoman when asked about a report in the Japanese daily Yomiuri Shimbun that Tokyo was discussing "giving up its bid to build the nuclear reactor" in Japan.

French President Jacques Chirac also fueled speculation that ITER will go to his country in a TV interview Tuesday. "France is on the verge of getting ITER sited at Cadarache," he said, referring to the French proposed site.

"We are continuing discussions to clarify the roles of the host of ITER and the non-host," insisted Antonia Mochan, spokeswoman for EU science and reesarch commissioner Janez Potocnik.

Her comments implied that talks may be under way to give concrete roles both to the eventual host of the project and to another country. Speculation has been rife that the EU is trying secure the right to host the ITER site in return for offering Japan sweeteners of some kind.

Talks among the six parties building the ITER have long failed to decide who will host the project billed as a test bed for a safe, inexhaustible energy source of the future.

The United States and South Korea support Japan's offer to build ITER in Rokkasho-mura, while the EU, China and Russia back France's bid for the project in Cadarache in southern France.

The EU spokeswoman said she was aware of the Japanese newspaper report about possible diplomatic movement, but said: "We have received no official indication" that Japan might be ready to abandon its bid.

But an EU official acknowledged that discussions are focussing notably on what ITER-related research projects could be given to countries other that the one which secures the right to host the reactor itself.

"Although I wouldn't use the term sweetener," she said.

The official confirmed that there will be a meeting of senior EU and Japanese officials in Geneva over the next couple of days on the issue, but downplayed hopes of an accord there.

Asked about the signs of movement indicated by Chirac and the Japanese newspaper report, she added: "I have absolutely no idea where this has come from."

Japanese Prime Minister Junichiro Koizumi said after talks with EU leaders in Luxembourg earlier this week that he hoped to resolve the ITER dispute as soon as possible.

The EU spokeswoman declined to forecast when exactly an accord will be struck. "Discussions are under way in a very constructive, very open way," she said.

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