The decision comes only two days after the UN nuclear watchdog agency censured Iran, demanding it immediately stop building a newly revealed enrichment facility near the holy city of Qom and freeze all uranium enrichment activities.

A Cabinet meeting headed by President Mahmoud Ahmadinejad ordered the Atomic Energy Organisation of Iran to begin building five uranium enrichment sites that have already been studied and propose five other locations for future construction within two months.

In Vienna, spokesperson Gillian Tudor said the UN's International Atomic Energy Agency would have no comment. But the announcement is likely to stoke already high tensions between Iran and the West over its controversial nuclear activities.

Iran has one industrial-scale uranium enrichment plant near Natanz, in central Iran. The IAEA said earlier this month that about 8 600 centrifuges had been set up in Natanz, but only about 4 000 were enriching uranium. The facility will eventually house 54 000 centrifuges.

The newly revealed enrichment site, known as Fordo, is a small scale site that will house nearly 3 000 centrifuges.

IRNA said the Cabinet ordered that the 10 new sites have a scale equal to Natanz's.

In the enrichment process, uranium gas is spun in centrifuges to purify it. Enriched to a low degree, the result is fuel for a nuclear reactor - but highly enriched uranium can be used to build a warhead. The United States and its allies accuse Iran of secretly seeking to develop a bomb, a claim denied by Iran, which says it seeks only to generate electricity.

Under Iranian law, Iran's nuclear agency has been tasked with providing 20 000mW of electricity through nuclear power plants during in the next 20 years. IRNA said the country needs to build enrichment facilities to produce nuclear fuel for its future power plants.

Ahmadinejad told the Cabinet that Iran will need to install 500 000 centrifuges throughout the planned enrichment facilities to produce between 250 to 300 tons of fuel annually.