Britain, France and the United States set the stage for a dramatic confrontation with Iran when they revealed the existence of a secret nuclear site inside a mountain near the holy city of Qom as evidence of Tehran’s efforts to deceive the international community.

The coup de théâtre came at the opening of the G20 meeting in Pittsburgh after three days of intense diplomacy at the UN General Assembly. President Obama, President Sarkozy and Gordon Brown took turns to demand that Iran disclose its nuclear ambitions and threaten new sanctions.

Later, Mr Obama raised the spectre of military conflict, saying that failure by Iran to give up its pursuit of nuclear weapons would lead down “a path that is going to lead to confrontation”.

“Iran is on notice that when we meet with them on October 1 they are going to have to come clean and they are going to have to make a choice,” he said.

Mr Obama added that he would prefer a diplomatic resolution but added: “We do not rule out any options when it comes to US security interests. It’s up to the Iranians to respond.”

Britain was said to have played a leading role in the operation to expose the secret uranium enrichment plant, at Qom, which officials say could only be used for military purposes.

Three years of intensive investigation and surveillance by the most trusted of America’s intelligence allies: Britain, France and Israel, led to the discovery.

“We will not let this matter rest,” said Mr Brown. “The level of deception will shock and anger the whole international community and it will harden our resolve.”

Nicolas Sarkozy, the French President, said Iran should allow inspectors into its plant in order to prove one way or another whether it was designed to create fuel, as Iran claims, or weapons.

“Let the IAEA (International Atomic Energy Agency) make an inspection and we will see who was right,” he said. “I want them to be right, but they need to let us make the controls.”

The revelation raises the stakes significantly for the meeting next week between Iran and the five members of the Security Council plus Germany. Russia opened the door to new sanctions on Iran this week but China remained opposed. That could change, the leaders said. Sanctions could be imposed by December if Iran refused to come clean on October 1.

The existence of the plant shrinks the timescale by which Iran could build a nuclear bomb. Iran wrote to the IAEA, the UN’s atomic watchdog, on Monday to declare the site when it discovered that its secrecy had been breached, but the world leaders were already preparing to break the news.

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