Australia may relinquish its nuclear-free status after the prime minister announced that it is to study whether to set up a nuclear power and enrichment industry.
"I have always maintained that holding the reserves of uranium that we do, it is foolish to see ourselves simply as an exporter of uranium," John Howard said on Tuesday.
Australia is home to about 40% of the world's uranium, but has no nuclear power industry and has only one research reactor, in Sydney.
"I think we should also look at the value-added process, which is principally enrichment, and we should also look at whether nuclear power stations become economically feasible," Howard told reporters.
The announcement drew criticism from environmentalists. The Australian Greens party said Howard was putting the environment behind the needs of the international nuclear industry.
Christine Milne, a Greens senator, said in a statement: "The nuclear debate is a sideshow to the greatest challenge facing Australia, and that is climate change."
Australia is also one of the world's biggest exporters of coal, and Howard's conservative government has strongly supported coal mining companies despite calls for more renewable energy.
But he said on Tuesday that support for nuclear energy was growing, and that even some environmentalists supported it because it was a cleaner energy source.
There are 441 nuclear power plants worldwide with more planned in China and India to meet growing energy demands, while South Korea and Russia also want to increase nuclear power generation.
A survey in 2005 found that 47% of Australians supported nuclear power and 40% opposed it.
The government's Nuclear Science and Technology Organisation has said that four or five nuclear power stations would have to be built in eastern Australia for the industry to be viable.
The coal industry welcomed the inquiry, but said the development of low-emission coal technology meant that zero-emission coal-fired power stations would be available by the time nuclear power could be generated in Australia.