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By Michelle Moghtader

DUBAI Sun May 18, 2014 3:14pm BST

A view of the Arak heavy-water project 190 km (120 miles) southwest of Tehran August 26, 2006.

Credit: Reuters/ISNA/Handout

DUBAI (Reuters) - Iran appeared to take a harder line in its nuclear dispute with world powers on Sunday by dismissing as "ridiculous" one idea that could allay Western concerns about a planned atomic research reactor.

The fate of the heavy-water reactor at Arak, which has not yet been completed, is one of several thorny issues in talks between Iran and six powers aimed at reaching a long-term deal on Tehran's nuclear programme by an agreed July 20 deadline.

"It is ridiculous that the power of the (Arak) reactor would be cut from 40 megawatts to 10 megawatts", nuclear negotiator Abbas Araghchi said, the official IRNA news agency reported.

Western powers fear the Arak plant - 250 km (150 miles) southwest of Tehran - could provide a supply of plutonium - one of two materials, along with highly enriched uranium, that can trigger a nuclear explosion - once operational.

Iran says it would produce isotopes for medical treatments, and denies any of its nuclear work is aimed at making a bomb.

If operating optimally, Arak could produce about nine kg (20 pounds) of plutonium annually, enough for about two atom bombs, the U.S. Institute for Science and International Security says.

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Iran voices tougher line on planned nuclear reactor