Iran’s Supreme Leader dramatically raised the stakes in his country’s political crisis yesterday by demanding an end to the massive street demonstrations and warning of a violent crackdown if they continued. He also accused "treacherous" Britain of leading a western conspiracy to destablise the Islamic Republic by fomenting the protests.

Ayatollah Ali Khamenei’s uncompromising speech raised fears that he could unleash his formidable security forces on a mass protests as early as today, when tens of thousands of opposition supporters are expected to defy him by joining a Tehran rally organised by reformist clerics.

His words caused widespread alarm. European leaders meeting in Brussels demanded the regime “refrain from the use of force against peaceful demonstrations”. Nicolas Sarkozy, the French president, urged Iran not to go “beyond the point of no return”. Navi Pillay, the UN human rights chief, feared the “illegal use of excessive force”.

Speaking for the first time since Mahmoud Ahmadinejad’s hotly-disputed re-election, Ayatollah Khamenei sided firmly with the president, denied the vote was rigged, and accused foreign powers led by Britain of fomenting the protests to destabilise the Islamic Republic.

Addressing Friday prayers at Tehran University, the bearded septuagenarian offered no concessions to the millions of irate Iranians who have taken to the streets this week. Instead he issued an unmistakable warning to Mir Hossein Mousavi and Mehdi Karroubi, the defeated candidates.

“Those politicans who have influence on people should be very careful about their behaviour if they act in an extremist manner,” he said. “This extremism will reach a level which they will not be able to contain. They will be responsible for the blood, violence and chaos."

Following Ayatollah Khamenei's speech, President Obama made rare comments on Iran’s post-election crisis, although critics — including his former election rival, Republican Senator John McCain — say he did not go far enough. “I’m very concerned, based on the tenor and tone of the statements that have been made, that the Government of Iran recognise that the world is watching,” Mr Obama said in an interview with CBS News.

"And how they approach and deal with people who are, through peaceful means, trying to be heard will, I think, send a pretty clear signal to the international community about what Iran is, and is not."

The US House of Representatives and Senate passed identical resolutions condemning Tehran’s crackdown, expressing support for “all Iranian citizens who embrace the values of freedom, human rights, civil liberties and rule of law”. Robert Gibbs, Mr Obama's chief spokesman, welcomed the resolutions.

Mr Mousavi did not respond immediately to Ayatollah Khamenei’s 90-minute televised sermon, but the Supreme Leader made clear that the former prime minister would be cast from Iran’s political establishment, and perhaps arrested, if he did not drop his demands for a new election. The threat appeared to extend to his backers, the former presidents Ali Akbar Rafsanjani and Mohammed Khatami.

Mr Karroubi, a former parliamentary speaker, responded with an open letter demanding a fresh election, and denounced government repression.

“Accept the Iranian nation’s will by cancelling the vote and guarantee the establishment’s survival ," he said.

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