Iran steps up confrontation with Europe on nuclear deal

Iran yesterday stepped up its confrontation with European countries as its Supreme Leader threatened to break off negotiations over its suspect nuclear weapons programme.

Senior officials from Britain, France and Germany yesterday held negotiations in Vienna with an Iranian delegation to persuade Iran into indefinitely suspending uranium enrichment ahead of a deadline in one month. It could be used to produce a nuclear weapon.

The EU countries are warning that Iran must comply with the demand in time for the next governors' meeting of the International Atomic Energy Agency on 25 November or face being referred to the UN Security Council for punishment. Initial reports after the talks sounded positive, as both sides spoke of some progress and agreed to meet again next week. But a British official said ominously: "I don't think we're that close yet" to an agreement.

Last night, making his first comments on the dispute on which he has the final say on behalf of Iran, the country's Supreme Leader, Ayatollah Ali Khamenei, rejected a long-term suspension of uranium enrichment. "If there is any form of threat in the talks, it will show a lack of logic on the part of [Iran's] partners in the negotiations. In that case, the great Iranian nation and the Islamic Republic of Iran will reconsider the very basis of negotiations and co-operation," he said.

Iran has heightened tensions by testing a long-range missile on 20 October, while hardliners in parliament have introduced a bill to force the government to resume enrichment and halt snap UN inspections of nuclear facilities. There are fears that the Iranians will try to wring every possible concession right up to the IAEA meeting.

The Iranians also have their eye on the American elections next Tuesday, in the hope that a Kerry administration would adopt a less hard line than George Bush, who wants the Security Council to take action against Iran. Iran has insisted its nuclear programme is for peaceful purposes.

In their "last chance" offer to Tehran, the three European countries are offering Iran the acquisition of a light water research reactor and resumed trade negotiations with the EU, in return for compliance. The EU states would also back the Russian Bushehr nuclear reactor project in Iran and Russia's guarantees of reactor fuel.

They privately recognise that there is not enough support among Security Council members to impose sanctions, and there are fears that sanctions could prove counter-productive if the Council is not united.

The International Institute for Strategic Studies said last week that in the cases of Iran and North Korea, "the US and its allies may not have sufficient instruments of enticement or coercion to achieve disarmament. The threat of effective sanctions is difficult to realise and military options are unappealing."

An independent expert said the deal being offered by the Europeans was favourable for Iran, adding that the Iranians would rather accept European technology than Russian.