European foreign ministers failed last night to back Britain in a threat to freeze the €14 billion trade in exports to Iran, as the hostage crisis descended into a propaganda circus.

Tony Blair could only issue a new statement of disgust as Iran tormented him with another sailor’s video confession and a fresh letter from the young mother detainee.

A first written message from the Tehran Government offered some hope of a deal, but time is running out before the Iranian new year holiday ends and militant students and politicians return to business.

EU foreign ministers meeting in Germany called for the sailors to be freed but ruled out any tightening of lucrative export credit rules. The EU is Iran’s biggest trading partner. British officials are understood to have taken soundings on economic sanctions before the meeting but found few takers.

France, Iran’s second-largest EU trading partner, cautioned that further confrontation should be avoided. The Dutch said it was important not to risk a breakdown in dialogue.

The latest video and written confessions appeared the most stage-managed yet.

Nathan Summers, a 21-year-old sailor, is seen clearly being prompted and apparently struggling to remember his lines as he apologises for trespassing in Iranian waters. His father, Roy Summers, 50, of Hayle, Cornwall, said: “Nathan is a man of very few words. He was obviously given a script to read. Nathan will have gone along with what they asked him to do, just to keep the situation calm.”

Regulars at the Cornubia Hotel, Nathan’s favourite drinking place, have put yellow ribbons on the wall to show that their thoughts are with the sailor, a regular player for Hayle Football Club.

The Iranian Embassy in London released a third letter purporting to be from Faye Turney, this time addressed to “British people”. Her previous written confessions were directed at her parents and MPs.

It compares her comfortable treatment so far with the abuse inflicted on Iraqi prison detainees by Coalition guards. “Whereas we hear and see on the news the way prisoners were treated in [Abu Ghraib] and other Iraqi jails by British and American personnel, I have received total respect and faced no harm,” it states.

Gordon Brown, the Chancellor, visiting troops in Afghan-istan, said that the treatment of Faye Turney was “cruel, callous, inhuman and unacceptable”. The Prime Minister said: “I really don’t know why the Iranian regime keeps doing this. All it does is enhance people’s sense of disgust.”

In Iran tens of thousands of football fans reportedly chanted “Death to England” while tourists burnt an effigy of Mr Blair dressed as a pirate.

The cleric Ahmad Khatami, a member of the Assembly of Experts, said in his Friday sermon in the capital: “Today, Britain is a failed, isolated power who acts as a middleman for America. If they continue their bullying they will pay a high price. This Iran is a great Islamic and powerful Iran who is standing against America, who is the master of Britain.”

A letter from the Iranian Foreign Ministry to Britain stopped short of requesting the apology that was demanded previously. It called for a “guarantee to avoid the recurrence of such acts”. But London cannot be sure who is in charge in Tehran. The letter is from the Foreign Ministry, not the hardline Revolutionary Guards who are believed to be holding the captives may be unwilling to surrender them.

Britain’s response to the seizure of its sailors and Marines has been branded weak by Republicans in Washington. John Bolton, until recently the US Ambassador to the United Nations, described the Government’s incremental approach as “pathetic”.

He said that Mr Blair should be threatening “real pain, real economic sanctions” unless Iran released the sailors immediately. “Britain has got to be tougher here,” he said.

Newt Gingrich, the former Speaker of the House of Representatives, urged Britain to threaten military force to destroy Iran’s petroleum industry.

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