EUROPE and Iran were last night headed for a serious diplomatic showdown, after Tehran vowed that it would resume work on its controversial nuclear programme, appearing to snub a long-awaited compromise from Britain, France and Germany.

Ambassadors from the three countries presented the Iranian Foreign Ministry with a 34-page proposal yesterday, called the Framework for a Long-term Agreement. The document proposed incentives to Iran, which would be allowed to develop a civilian nuclear programme if it accepted binding commitments not to develop atomic warheads. It proposed a meeting at the end of the month in Paris to discuss the offer.

But the newly installed government of President Mahmoud Ahmadinejad said that it would reply formally tomorrow to the proposal, and hinted heavily that it had already decided to reject it.

Hossein Moussavian, Iran’s nuclear negotiator, said: “My personal view as one of the negotiating team, is that this proposal cannot be accepted by Iran.” He described the offer as a “clear violation” of previous agreements between Iran and the European Union. “They negate Iran’s inalienable right,” he said.

At the heart of the dispute is Iran’s attempts to build a nuclear fuel cycle, in particular to convert, enrich and reprocess uranium, the element used both as nuclear fuel and, in its highly-enriched form, as the core of an atomic bomb.

After nine months of tortuous diplomatic contacts, the three EU countries thought they had found a well-balanced compromise. The EU is prepared to help Iran to build light water reactors and guarantee supplies of nuclear fuel to run them. But in return Tehran would have to abandon attempts to build a “fuel cycle” and in particular close down its heavy water reactor at Arak, south of Tehran.

To sweeten the offer, the Iranians were also promised other political and economic incentives, including joint co-operation on regional security, terrorism and fighting drug smuggling, a new trade agreement with the EU and help in joining the World Trade Organisation. The package could help Iran’s new government to tackle huge social and economic problems.

“This is the fork in the road for Iran,” a British diplomat said. “We have presented Iran with two stark choices. The first is the right choice, the second is the wrong choice. If Iran chooses the second it can mean only one thing — that it desires nuclear weapons.”

Nevertheless, the issue has become a matter of national pride in Iran, which has been trying to acquire nuclear technology since the days on the Shah in the 1970s.

Yesterday it again insisted that it had the right under international law to pursue its own civilian nuclear ambitions under the terms of the Non-Proliferation Treaty.

But the consequences of going it alone could be very serious. America is already pressing the international community to take action against Iran, which it is convinced is building nuclear weapons. There are also fears that Israel might take military action against Iranian nuclear sites if the Iranians are close to acquiring a bomb. At the very least the matter is likely to provoke a serious international crisis that could end up in the United Nations Security Council where Iran could face punitive sanctions.

By way of demonstrating the possible dangers, Britain, France and Germany yesterday also requested an emergency meeting of the International Atomic Energy Agency (IAEA) in Vienna on Tuesday to debate what action to take if Iran does resume work on its uranium conversion plan at Isfahan.

Philippe Douste-Blazy, the French Foreign Minister, said the world will face a “major international crisis” if Iran does not accept the proposals and “heed the voice of reason”.

If Iran resumes conversion, he warned: “Then it is certain that the international community will ask the Security Council to intervene.”

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