IRAN is believed to have begun small-scale enrichment of uranium, raising the stakes in its dispute with the International Atomic Energy Agency (IAEA) over the extent of its nuclear ambitions.

A report to be published by the United Nations nuclear watchdog tomorrow is expected to claim that scientists at Iran’s plant in Natanz have set up a “cascade” of 10 centrifuges to produce enriched uranium — the fuel for nuclear power plants or bombs.

Iran is a long way from the 50,000 centrifuges it would need for full-scale enrichment, but experts said that getting a small number of them to work together meant it had overcome some technical hurdles.

The report, by Mohamed ElBaradei, director-general of the IAEA, will also accuse Tehran of continuing to deny inspectors access to crucial people and sites linked to its 20-year-old nuclear programme.

ElBaradei’s findings will set the tone for discussions at the UN security council next month which American officials believe could lead to sanctions against Iran this summer.

Tehran’s relations with the international community hit a low point this month when the IAEA voted overwhelmingly to report it to the security council, expressing doubts that its nuclear programme was “exclusively for peaceful purposes”.

Mahmoud Ahmadinejad, the country’s volatile president, responded by vowing to resume “commercial scale” enrichment, suspended in 2004.

International concerns over Iran’s intentions have been increased by the emergence in recent weeks of documents that for the first time appear to provide scraps of evidence of a covert weapons programme.

Attention is focusing on the so-called Green Salt Project, a previously undeclared scheme to process uranium. The project was linked to tests on high explosives and missile design, suggesting a “military nuclear dimension”, the IAEA said. Inspectors travelled to Tehran this weekend to obtain more information.

It is thought that some of the clandestine work was done at a plant in Lavisan, near Tehran, under the auspices of a body known as the Physics Research Centre. Iran denied IAEA inspectors access to Lavisan until 2004 by which time the buildings had been demolished.

Tehran is believed to have persisted in its refusal to allow inspectors to interview up to five research centre officials. “This is a shame because we believe these are high-ranking military officials actively involved in a nuclear weapons programme,” said a US official.

Diplomatic efforts have continued to persuade Tehran to agree not to enrich uranium itself but to be supplied with the material by Russia. Iran wants to be allowed to conduct some enrichment on its territory.

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