Isao Sasaki, 64, a former trading company executive, is suspected of selling more than $2m worth of precision measuring equipment to China in December 1996.

The Hitachi-made equipment, which has legitimate purposes, can be used to produce nuclear weapons, police say.

As part of their investigation, police carried out raids on Hitachi's Tokyo offices.

Wrong destination

The Japanese Trade Ministry includes the devices on a list of sensitive equipment, for which special export licences are needed, according to investigators.

Mr Sasaki allegedly obtained export documents by saying the destination country was South Korea. He is then said to have transported them on to China.

The instruments are intended for non-military engineering but can be also be used in manufacturing equipment that extracts the high-density plutonium that is generated during the burning of uranium.

Hitachi has refused to comment on the on-going investigation.