FRANCE earned the gratitude of the Tehran Government yesterday by rounding up the leaders of the main Iranian exile opposition movement in spectacular early-morning raids in the outskirts of Paris.

About 1,300 police stormed the headquarters of the National Council of Resistance of Iran (NCRI) at Auvers-sur-Oise, a village north of Paris, and 12 other sites. They detained 160 people and seized computers and $2 million (£1.2 million) in cash. Maryam Rajavi, 50, who carries the title of “future president” of Iran, was among those arrested in what police said was one of their biggest operations of the type for decades.

Nicolas Sarkozy, the Interior Minister, said that the decision had been taken to dismantle the organisation, a political movement that speaks for the armed People’s Mujahidin fighters, because it was trying to set up a Mujahidin “base camp” in France.

The People’s Mujahidin have been based in Iraq since the mid-1980s. Its leaders signed a truce with invading US forces but, according to reports from Baghdad, many of its leaders took refuge in Europe before the US invasion.

NCRI lawyers accused the French Government of mounting the operation to please Tehran at a time when Washington is raising pressure on the Islamic Republic.

In the aftermath of its feud with the US over the Iraq war, France has been making overtures to Iran in what it says is a drive to encourage its responsible re-engagement in the region. The policy is seen by the Bush Administration as part of President Chirac’s strategy of opposing US power.

The lawyers noted that the NCRI leaders had political refugee status and had been based for many years in Auvers with the protection of the French authorities.

“We would like to believe that these spectacular arrests are not inspired by a desire to please the Iranian authorities and do not constitute ‘collateral damage’ from French-American relations,” they said.

France’s rivalry with the US contributed to the granting of haven to the late Ayatollah Khomeini in France, before he returned to lead the 1979 revolution that overthrew the US-backed Shah.

The People’s Mujahidin is seen by Washington as a possible instrument for “regime change” in Tehran.

The Marxist movement, which initially supported the Islamic revolution and then broke with the fundamentalist regime, was formally designated last year as “terrorist” by the State Department and the EU but it is known to have links with the CIA and other US agencies.

Its support from Iraq, Iran’s adversary in the bloody war of the 1980s, has largely discredited it in the eyes of Iranians but hardline circles in the Bush Administration are reported to be wanting to co-opt the movement as an ally, along the lines of the partnership with the Northern Alliance in Afghanistan.

Jean-Louis Bruguière, the Paris investigating judge in charge of anti-terrorist cases, headed the round-up on suspicion of “criminal association with a view to preparing acts of terrorism and financing a terrorist organisation”. However, judicial sources said that the operation was on orders from the highest level of the Government.

The whereabouts of Massoud Rajavi, the founder of the movement and husband of Maryam Rajavi, is unknown. Mr Rajavi was expelled from France in 1986 as a gesture towards Iran when France was trying to win the release of hostages held by Iranian-backed groups in Lebanon.

Ali Safavi, a Mujahidin spokesman in London, said: “The individuals arrested in the unjustifiable raids this morning were all in France legally and had not conducted any illegal activity whatsoever.”

• A 38-year-old Iranian man set himself on fire outside the French Embassy in London in protest at the crackdown. The man, who had doused himself in petrol, was taken to hospital with 40 per cent burns.

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