After months of hesitation Ottawa announced on Thursday it would open talks about whether to participate in missile defense, which is designed to shoot down rockets fired from so-called rogue states such as North Korea.

The Canadian military had strongly backed the idea of starting the talks since, if Ottawa joined up, the system would be run through the existing bilateral North American Aerospace Defense Command in Colorado (NORAD). But critics say missile defense could trigger an arms race, especially if Washington broadens the current concept of ground-based interceptors and starts on the weaponization of space -- an idea Ottawa has always opposed.

Chretien, making his first public comments about the decision to start talks, said Canada needed to discuss with the United States the best ways of defending the North American continent but made clear there were limits. "We want to participate -- hopefully through NORAD -- to the defense of North America against missiles. We will not participate in a program if it is to be the weaponization of space," he told a news conference in St Petersburg.

Chretien said Canada needed to be at the table with the Americans because missiles heading for U.S. targets would first pass over Canadian territory.

"You can't tell a missile 'Stop, you have to show your papers before proceeding'. You have to be very realistic. This is the defense of the continent (we are talking about) and we have participated with America through NORAD for 50 years," he said.

Canadian officials say the government will have to take a final decision within the next few months. If Ottawa did join it could well dissipate some of the anger the White House expressed after Chretien refused to send troops into what he called the "unjustified" Iraq war.

Russia initially opposed U.S. missile defense plans adamantly. In a first step toward setting up a missile defense umbrella, the U.S. last year unilaterally withdrew from the 1972 Anti-Ballistic Missile (ABM) treaty which banned such systems.

In recent Russia has however reluctantly softened its stand, instead asking Washington to give it a role in missile defense.

Chretien also told reporters Canada would be giving C$149 million ($110 million) to a series of projects to help manage spent nuclear fuel from submarines in northern Russia as well as help find jobs for thousands of former weapons scientists.

The contribution is part of the C$1 billion Canada has committed to the Global Partnership project, under which the United States and the Group of Eight leading nations have vowed to spend $20 billion over 10 years to cut the chances of Russia's vast nuclear arsenal ending up in the wrong hands.