The administration plans to ask in its 2007 budget next month for $250 million so the Department of Energy can develop new ways to reprocess nuclear fuel to make it harder to use its plutonium byproduct in nuclear weapons, the source said.

"We expect (the) nuclear recycling program to be reflected in DOE's budget," the source told Reuters, speaking on condition of anonymity.

A White House spokesman declined to comment on the proposal. An administration official said a consensus stance had been reached regarding reprocessing, but declined to provide details.

The United States stopped recycling nuclear fuel in the 1970s because it was too expensive and there was concern terrorist groups or rogue nations could get access to plutonium and make nuclear bombs.

Reprocessing separates uranium and plutonium from spent fuel so the elements could be used further.

Twelve of the 33 nations that generate electricity from nuclear power plants practice reprocessing, but it has not been done in the United States for more than 20 years, according to the Nuclear Energy Institute trade group.

President Jimmy Carter banned reprocessing because of concerns it could spread nuclear weapons. President Ronald Reagan lifted the ban and President Bill Clinton reinstated it.

Administration officials had hoped President George W. Bush could announce the reprocessing plan in his State of the Union speech to Congress next Tuesday, but that move was scrapped because details were not completed, government sources said.

But Bush is expected advocate nuclear energy as a way to reduce reliance on foreign oil, White House officials said on Friday. Bush has long called for building more nuclear-power plants in the United States.

"We've been talking with a number of countries about how to move forward on expanding nuclear energy to meet our global energy needs," White House spokesman Scott McClellan told reporters.

"It's an energy source that is clean ... it helps us address our energy and national security need," he said. "The president is very focused on this matter."

Administration officials have been on Capitol Hill briefing congressional staffers on the reprocessing plan.

Republican Pete Domenici of New Mexico, who chairs the Senate Energy Committee, has long called for the United States to resume reprocessing of spent nuclear fuel.

The reprocessing plan will come up at Feb. 9 committee hearing on the Energy Department's budget. Energy Secretary Sam Bodman is scheduled to testify.

On March 2, the Senate Energy and Water Development Appropriation's Subcommittee, which Domenici also chairs, will hold a hearing devoted to the reprocessing plan. Deputy Energy Secretary Clay Sell is to testify.

The nuclear industry supports reprocessing. However, there are several challenges including a need for "massive and expensive facilities" and federal licensing, Marvin Fertel, the NEI's chief nuclear officer, testified at a congressional hearing last July.

The industry has said that even with reprocessing, the government must still open a long-term Yucca Mountain nuclear waste storage site near Las Vegas.