The Labour Government was against uranium sale to India as it is not a NPT treaty signatory, but the sources told The Age daily that Canberra was not expected to obstruct approval of the Indo-US deal at the 45-member Nuclear Suppliers Group.

The report came as Prime Minister Manmohan Singh met his Australian counterpart Kevin Rudd for the first time on the sidelines of the G8 Summit in Toyako.

Rory Medcalf, an international security analyst at the Lowy Institute for International Policy, said the Rudd Government needed to balance Australia's increasingly important relationship with India with its strong stance on nuclear non-proliferation.

"I would not rule out Australia making a few noises about the deal," he said adding "But I'd be surprised if Australia was the chief obstacle to it at the Nuclear Suppliers Group."

At a meeting last month between External Affairs Minister Pranab Mukherjee and his counterpart Stephen Smith, Australia had refused to rescind the ban on sale of uranium to India but said it will take a decision on approving the "123 nuclear agreement" at the NSG when the time comes.

After that meeting, Smith said the government would "bear in mind" the importance of the issue to India and the US before taking a position on the deal's approval at international forums.

The approval process for the 123 Agreement was a "separate issue from the issue of Australian export of uranium", Smith said.

Opposition Foreign Affairs spokesman Andrew Robb on Tuesday called on Rudd to tell his Indian counterpart Manmohan Singh that Australia would not block the sale of uranium to India for clean-electricity generation.

"It is hypocrisy to lecture India on making serious commitments on climate change and, while at the same time, styming India's ability to produce greenhouse-gas-free power," he said.