NEW YORK - The failed investment bank Lehman Brothers sits not only on toxic sub-prime mortgage loans but also toxic nuclear stockpile.

According to reports, the bankrupt bank holds up to 50,000 pounds of uranium - called yellowcake - which can be upgraded to run nuclear plants - and make nuclear weapons.

Lehman filed for bankruptcy after the Bush administration refused to bail it out last September.

After bankruptcy, it managed to sell its brokerage business to Barclays, leaving it saddled with $200 billion worth of sub-prime loans and yellowcake worth about $1 billion.

But since the price of uranium has fallen from $65 to $40 because of the global recession, Lehman is holding on to its nuclear stockpile for better returns, reports said.

‘It turns out we were looking in the wrong place for weapons of mass destruction,” said the New York Post Wednesday in a rather sarcastic comment on the US-led invasion of Iraq in search Saddam Hussein’s deadly arsenal.

‘They were not in Iraq. They were in Lehman Brothers’ portfolio,” the daily added.

The report said the quantity of yellowcake in possession of Lehman is enough to make a nuclear bomb.

‘And it (uranium stockpile) is at least as radioactive as the toxic sub-prime mortgages that brought down the storied Wall Street icon,” the newspaper said.

‘And not only does Lehman have the yellowcake, it may have to eat it, too.

‘It can’t get rid of the ore, because with the possible exception of North Korea, nobody is willing to cough up the price it wants - because the uranium market has tanked,” the daily said. The failed investment bank’s uranium stockpile is said to be lying at ’several Canadian facilities,” the report said.

Canada accounts for about a third of the world’s total uranium production.