Swedish Defence Minister Karin Enström has demanded an explanation from the general director of the state-run FOI defence research institute, over an alleged weapon's co-operation with China, according to Radio Sweden.
"Sweden should not get around the weapon's embargo on China and therefore I have called on the general director to clarify that there is no substance in this," Enström told Swedish Radio News.
According to reports, the agency had begun negotiations to sell software to China, which experts say could be used in the country's nuclear weapons programme.
Uncovered documents reveal that secret negotiations have been taking place for several years, despite the weapons embargo that was imposed on China after the 1989 Tiananmen Square massacre, the report added.
According to the programme, the state-run agency has been using the Royal Technical College KTH in Stockholm as a go-between to sell the software.
A similar format, with FOI using someone else as a go-between in a sensitive deal, was uncovered in 2012 and then related to a planned weapons factory in another dictatorship, Saudi Arabia. That story eventually led to the resignation of the Defence Minister.
Swedish Radio News now reports that the authority that tries cases of weapons export, called ISP, criticise FOI for withholding information in the case revealed on Wednesday. FOI never said that the country importing the software was China, and also failed to mention that it could be used for constructing nuclear missiles.
Earlier on Wednesday, the general secretary of FOI told media that he welcomes anyone looking into the deal, which he claims is a civilian programme. He also says his agency has been completely open about any links to China.
But Jan-Erik Lövgren, deputy general director of the weapons export control authority ISP, tells Swedish Radio News that "this is a function that can be used in programmes for weapons of mass destruction".