Iran vowed yesterday to press ahead with its nuclear programme and rejected a United Nations report accusing it of expanding its uranium enrichment activities.

The country’s leaders said the UN verdict — that Iran was in open defiance of a Security Council resolution — was illegal and unacceptable.

The six-page report sets the stage for a showdown between the West and Iran over its nuclear programme and will trigger moves for a new sanctions package.

The findings were delivered by Mohamed ElBaradei, director of the International Atomic Energy Agency, the UN’s nuclear watchdog.

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He said that Iran had failed to comply with the UN’s December 23 demands — Resolution 1737 — that it halt its uranium enrichment programme.

In recent months Iran had set up hundreds of uranium-centrifuges in an underground installation in Natanz, it said. And Iran had delivered nearly nine tonnes of the uranium gas into the facility for enrichment.

Dr ElBaradei also said that Iranian officials had told IAEA officials that they intended to expand their centrifuge installations to have at least 3,000 ready by May.

The report said that the Islamic republic has continued building both a heavy-water reactor and a heavy-water production plant, also in defiance of the Security Council.

Both enriched uranium and plutonium produced by heavy water reactors can produce the fissile material used in nuclear warheads. Iran denies such intentions, saying that it needs the heavy-water reactor to produce radioactive isotopes for peaceful purposes and is enriching uranium to generate energy.

The West, particularly Britain and the US, accuse Iran of being determined to acquire the bomb and fear that it will have a nuclear weapon within four years.In Tehran, the deputy head of Iran’s Atomic Energy Organisation, Mohammed Saeedi, said the IAEA’s demand for suspension was “against its rights” under the terms of the Nuclear Nonproliferation Treaty.

Condoleezza Rice, the US Secretary of State, said that Washington and its allies would use diplomacy to bring Iran back to the negotiating table. In addition to sanctions, Washington has been raising the pressure, including the deployment of extra aircraft carriers to the Persian Gulf.

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