Iran on Monday finally took control of its civilian nuclear reactor at Bushehr, a project begun 37 years ago by West Germany, wracked by setbacks, and finished by Russia.

Tehran has long touted Bushehr as proof of its peaceful nuclear intentions, but neighbouring countries and the West have expressed concern over the presence, in a volatile region, of the world's last remaining nuclear reactor that does not adhere to the post-Chernobyl Convention on Nuclear Safety.

The ISNA news agency said Iran and Russia signed a handover contract that in effect put Iranian technicians in charge of the 1,000-megawatt power plant.

No more details were provided, and it is not clear how much the plant has cost the Islamic state.

Atomic agency chief Ali Akbar Salehi said earlier that Russian experts would remain in Bushehr as part of a guarantee scheme for the operation.

"There will be a two-year warranty period, during which Russian experts will be present at the Bushehr plant," he told state television ahead of the handover ceremony in the southern city located across Gulf waters from southern Kuwait.

"Should any problem arise the Russian contractor is responsible for removing it," he said, adding that after that period Iran will be "fully responsible" for the plant's operation.

Construction of the facility began in 1975 with the help of West German company Siemens, which quit the project after the 1979 Islamic revolution over concerns about nuclear proliferation.

Work was hampered during the 1980-1988 Iran-Iraq war, until Russia agreed in the mid-1990s to take up the construction baton for a project that had originally been due for completion in 1999.

Finally finished more than a decade late and inaugurated in 2010, Bushehr did not come into service until 2011 because of repeated technical problems.

Since then, further difficulties have periodically hindered its operations.

Moscow has agreed to provide the plant's fuel for 10 years, with Tehran committing to return the spent fuel, amid Western concerns over its controversial uranium enrichment programme.

Tehran's nuclear ambitions have been at the heart of its troubled relations with world powers for years.

Western powers and Israel suspect that Iran's declared peaceful programme of uranium enrichment masks a covert weapons drive, a charge vehemently denied by the Iranian leadership.

Some Iranian officials accuse Russia of foot-dragging in Bushehr under pressure from the United States, which had sought in vain to prevent the project from reaching fruition.

Concern for neighbours

Construction of the Bushehr facility has sparked concern among Gulf Arab states, but both Iran and Russia say it is subject to safeguards of the International Atomic Energy Agency (IAEA), the UN watchdog.

Foreign experts say Tehran attaches great importance to Monday's handover, as it illustrates its self-sufficiency in harnessing civilian nuclear power.

But neighbouring nations and the West have concerns about Bushehr, given its location in an earthquake-prone part of the Gulf, especially since Japan's Fukushima disaster of 2011.

As the crow flies, the plant is far closer to Iran's neighbours than it is to its own capital, one foreign diplomat pointed out, adding: "The prevailing winds go towards Dubai, and marine currents towards Kuwait."

Iran sits astride several major fault lines and is prone to frequent earthquakes, some of which have been devastating.

On April 9, a 6.1-magnitude quake rocked the south, with an epicentre around 100 kilometres (60 miles) from Bushehr.

However, a spokesman for Russia's state nuclear corporation Rosatom -- which finished the plant -- at the time said "they did not even feel the tremors" in Bushehr.

Western concerns also include Iranian engineers' ability to run a power plant constructed of German, Russian and domestic components.

Iran has said it wants to produce 20,000 megawatts of electricity from nuclear power, which would necessitate building 20 1,000-megawatt reactors.

According to Iranian officials, negotiations with Russia are under way for cooperation on future plants.

Salehi said Sunday he expected work to start soon on a second plant upon completion of talks with Moscow, saying: "Negotiations are continuing and are well-advanced."

"Work will start soon," he added, without specifying a date.