As Iran yesterday defied the United Nations deadline for freezing its nuclear programme, its ambassador in London said that it had no intention of budging from its position. “For sure, we are going to stress our inalienable right . . . within the bounds of the NPT [Nuclear NonProliferation Treaty] to enrich uranium for peaceful purposes,” Rasoul Movahedian said.

The International Atomic Energy Agency, the UN watchdog, is expected to report to the UN Security Council today on Iran’s failure to answer all its inspectors’ questions. The agency wants to establish whether Iran’s aims are purely peaceful, as it maintains, or whether it plans to build a nuclear weapon, as the West suspects. In an interview with The Times, Mr Movahedian said that Iran would now offer to “finalise all the pending questions of the IAEA within three weeks if the case is sent back to the IAEA board”. One Western official said last night: “Spurious suggestions like this don’t help us to move forward. It’s remarkable that Iran is now saying that it could, if it chose, resolve them in a matter of weeks. It only underlines its failure to cooperate fully with the IAEA.”

Iran objected fiercely to last year's referral of the four-year dispute from the IAEA to the Security Council, after repeated censure by the agency. The council passed a resolution giving Iran 60 days, expiring yesterday, to freeze its most sensitive work on uranium enrichment. “We believe that negotiation is the only way we can resolve this issue,” Mr Movahedian said yesterday. He was appointed last summer by President Ahmadinejad, who changed many ambassadors in key Western capitals at a point of rising tension about the nuclear work. The June 2005 election of President Ahmadinejad, a hardliner, set the nuclear talks on a stormier course.

Mr Movahedian was dismissive of the financial sanctions that the US has imposed recently on Iran, on top of the limited measures that the Security Council endorsed in December. “The effect is quite small,” he said. “Iran has been under sanctions for three decades from the US. We do not get access to advanced technology from Europe. We have developed our own advanced technology . . . and in missile and nuclear technology, the focus of recent sanctions, we do not depend on any foreign assistance.”

Ebrahim Sheibani, governor of the central bank, also dismissed sanctions as “small stumbling blocks” yesterday, and said that Iran was cutting holdings of US dollars — now less than 30 per cent of reserves — to the “minimum level” needed to meet payments. “We are distancing [ourselves] from dollars, week by week,” he said.

Asked whether a compromise was still possible, Mr Movahedian said: “My Government still believes there can be a mutually acceptable compromise if they genuinely intend. Sometimes, it is easier to reach a compromise with individual Western countries.” He maintained that “there is willingness in the US to talk to Iran, and in some circumstances, we will talk to them.”

Iran has appeared startled by the escalation of the row. Talks were spearheaded at first by Britain, France and Germany but, since the stalling of talks, the European Union, and then the Security Council, have united to demand that Iran halt the work.

Tension rose in October 2005, when President Ahmedinejad said that “the regime occupying Jerusalem must vanish from the page of time”. The translation “wiped from the map” later appeared in Iranian news agency reports and made worldwide headlines; when the President has been confronted with the phrase in many interviews, he has not rejected it. Mr Movahedian said that the “wide misrepresentation” of the remark had been deliberate. The President, he said, had argued that Israel would “come to an end, by itself”, as a result of its aggressive policies. “It is not the policy of my Government to go after any entity and wipe it off” the map, he said.

“Iran has not attacked any country for three centuries, but it has been subject to aggression, especially by Saddam Hussein in the 1980s, with the full support of Western countries.”

He dismissed the US’s dispatch of a second naval carrier group to the Gulf as “gunboat policies”. “Iran will not yield to blackmail,” he said.

“It is not the first time that Americans are moving in their naval fleets inside the Persian Gulf and probably not the last time. What has it achieved?”

Tony Blair’s decision to cut troop levels in Iraq would help to improve relations, said Mr Movahedian. “We welcome the idea of withdrawing foreign forces,” he said. “We believe that a major disturbing obstacle in our relations will be removed if it occurs.”

Britain had “lost many opportunities in its relations with Iran”, he said. Mr Blair’s imminent departure was a chance for a new start, he said. “We hope that we could jointly seek to squeeze the potential that exists, for cooperation redefining the relationship at this new stage.”

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