Congressional negotiators on Thursday finalised a US-India civilian nuclear cooperation Bill after watering down provisions and eliminating language that both New Delhi and President George W. Bush's administration had said were outside the parameters of the July 18, 2005, agreement.

The United States Congress will vote on the Bill on Friday after which it will be sent to Mr Bush for his signature - a signing ceremony could take place as soon as Monday.

Congressman Tom Lantos, the top Democrat on the House International Relations Committee, remarked soon after the Bill was finalised: "This latest step in a long and sometimes arduous legislative process has resulted in a satisfying consensus."

"The conference report agreement strikes the right balance between giving the President the necessary flexibility to negotiate the best agreement possible with New Delhi, while at the same time preserving Congressional oversight," Mr Lantos said. "I fully expect this will be a law of which all involved in its creation can be proud."

The legislation is called the "Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006" after House International Relations Committee chairman Henry Hyde, an Illinois Republican, who partnered with Mr Lantos to draft the House version of the Bill.

The final Bill has significant and subtle changes that are bound to cheer New Delhi. The congressional conferees have dealt with all the concerns raised by Secretary of State Condoleezza Rice in a letter to Mr Hyde on November 28.

The original House version of the Bill, passed in July, included Section (4)(d)(4) which, although non-binding, urged the President to lobby other nations against supplying nuclear fuel to India if the United States terminated nuclear cooperation with India. New Delhi had called this section a "deal killer." This Section has been dropped from the final draft. Instead, a Sense of the Congress Section 102(13) says the US should not seek to facilitate or encourage the continuation of nuclear exports to India by any other party if such exports are terminated under US law.

The revised Bill also excludes parts of Section 107(3) of the original Senate draft that mandated a specific course of action for fall-back safeguards and end-use monitoring. India had said these bilateral safeguards were intrusive and unnecessary.

Instead, the revised Bill's Section 104(5)(b)(iii) says in the event the International Atomic Energy Agency is unable to implement safeguards, there will be appropriate assurances that arrangements will be put in place expeditiously that are consistent with requirements of the 123 Agreement. Sources said this leaves room for manoeuvre.

Section 105(3) of the Senate draft, which required an IAEA safeguards agreement to have "entered into force" at the time of the vote on the 123 Agreement in Congress, has been changed. In its place, Section 104(b)(2) of the new Bill says that India and the IAEA should have "concluded" all legal steps required prior to signature by parties of an agreement requiring the application of IAEA safeguards in perpetuity.

On Iran, which sources said was a "sticking point" during the conference session, the original Senate Bill included a binding clause Section 105(8) that sought presidential determination that India is "fully and actively participating in US and international efforts to dissuade, sanction, and contain Iran for its nuclear program consistent with United Nations Security Council resolutions."

In the revised Bill, Section 104(c)(2)(g) now calls for a description and assessment of specific measures India has taken to fully and actively participate in U.S. and international efforts to dissuade, isolate and if necessary sanction Iran.

While the desire to know India's positions on Iran remains, it has been changed from a written "determination" by the president to a "description and assessment." A "determination" seeks proof, while a "description and assessment" does not. Indian sources say New Delhi will be able to swallow its pride and live with this change, but Left coalition partners may still find it an irritant.

A US source said the Bill does "not seem to overcome Indian complaints regarding Iran and the transfer of sensitive nuclear technology. My sense is that there will be a lot of grumbling in some circles in New Delhi, and that they will try to 'correct the deficiencies' of the legislation when they negotiate the agreement for cooperation."

A House Republican source contended, "You're never going to please everyone in a conference report, but with everyone knowing how important this legislation is to the president and to U.S.-India relations, the conferees would have kept in mind the differences and attempted to make every effort to take them into account when crafting the final package."