Iran has pardoned and released the 15 British military personnel seized in the Gulf 12 days ago. At the conclusion of a rambling two-hour speech, President Mahmoud Ahmadinejad said the move was an Easter present to the British people.

After decorating members of the Iranian coast guard that captured the seven Royal Navy sailors and eight Royal Marines on March 23, Mr Ahmadinejad said he was prepared to forgive Britain for trespassing into Iranian territorial waters.

"This pardon is a gift to the British people," the President said, observing that it falls between the birthday of the Prophet Muhammad last weekend and the celebration of Easter.

"On the occasion of the birthday of the great prophet and for the occasion of the passing of Christ, I say the Islamic Republic government and the Iranian people — with all powers and legal right to put the soldiers on trial — forgave those 15."

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The only possible explanation is that the release was ordered by Ayatollah Ali Khamenei, Iran’s Supreme leader

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The hostages, who have been held in a secret location, were later shown on Iranian television shaking hands with the President in a release “ceremony” and are understood to be in the British Embassy compound, awaiting flights home tomorrow.

In an eagerly anticipated news conference in Tehran, which came after 24 hours of apparent progress in the delicate negotiations aimed at securing the release of the captured personnel, Iran's hardline President said Britain was not "brave enough" to apologise and that Iran had no regrets about detaining the sailors.

Mr Ahmadinejad said: "Iran has defended its land and will always defend its land. We are sorry that British troops remain in Iraq and their sailors are being held in Iran."

Today’s dramatic act came at the end of a wide-ranging address, in which Mr Ahmadinejad, who diplomats feared could upset the negotiations, criticised the make-up of the United Nations Security Council, the "Jewish-controlled" mass media and the "exploiter governments" of the UK and the America.

The Iranian President interrupted his speech to give bravery awards to three members of the Iranian coast guard and admonished the Royal Navy for sending a female sailor to the front lines. One of the 15 captured personnel was Leading Seaman Faye Turney, a married mother.

"Why is the most difficult task, patrolling in the sea, given to a woman? How can you justify seeing a mother away from her home, her children? Why don’t they respect family values in the West?" He asked the British Government.

Iranian television then showed pictures of the British personnel, wearing suits, being introduced to Mr Ahmadinejad at their release.

"We're very grateful for your forgiveness," Royal Marine Captain Chris Air, the senior officer in the group, told the Iranian President. "On behalf of the group I'd like to thank yourself and the Iranian people."

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