Vienna -- The UN's nuclear watchdog needs a major cash boost, according to budget proposals earlier this week that will force members to weigh concerns over Iran's nuclear ambitions against the tough economic climate.

The International Atomic Energy Agency (IAEA), which is probing allegations of illicit nuclear work in both Iran and Syria, is asking for an 11-percent rise in funding for 2010, plus a further 1.5-percent hike in 2011.

The nuclear watchdog says it will need 336 million euros (429 million dollars) for its day-to-day operations next year, up from around 300 million euros in 2009. That figure was expected to rise to 341 million euros in 2011.

The IAEA's nuclear verification activities account for over half its operational budget.

The UN agency estimated it needed an additional 33 million euros for capital investments in 2010 and another 43 million euros in 2011.

The budget will be discussed at an upcoming board meeting in March, but must be finally approved by all of the IAEA's 145 member states at the general conference in September.

The United States is the single biggest contributor, followed by Japan and Germany. American President Barack Obama has called for funding to be doubled over the next four years.

The budgetary concerns come at a pivotal time for the IAEA, as it looks for a successor to Director General Mohamed ElBaradei, who steps down later this year.

Pushing through the proposals could be tough at a time of global economic crisis, especially as other UN agencies have to make do with zero budget growth.

"This is not a proposal that we make lightly," ElBaradei wrote in a letter to member states accompanying the budget report. "But the increases stem from critical needs and priorities that have been ignored for far too long."

The IAEA has reached "a critical point," ElBaradei said. "If we carry on with business as usual, the agency's effectiveness and the quality of the services we provide will continue to erode to a dangerous level."

ElBaradei also stressed that it was time to reinvest in the IAEA for the future. The budget proposals "reflect our objective assessment of what is needed to equip the IAEA to deliver its statutory functions effectively and efficiently in the 21st century," he said. "There is no alternative to this crucial investment in the agency's future."

ElBaradei has long argued the IAEA is underfunded as it needs more manpower and equipment to cope with a growing interest in nuclear energy technology worldwide, and the increased proliferation concerns connected with that.

"The world recognizes nuclear proliferation and terrorism as being among the gravest threats to international peace and security," ElBaradei wrote in his introduction to the budget report. "Yet, as the agency's verification obligations continue to grow there have not been corresponding funding increases. The significant increases in resources ... are essential if the agency is to do the job entrusted to it in a credible manner."

AFP/Expatica