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Iran removed UN seals at its Natanz uranium enrichment plant and resumed research on nuclear fuel yesterday, drawing sharp Western criticism but no immediate threats of punitive action.

Teheran denies wanting nuclear technology for anything but a civilian energy programme aimed at satisfying the Islamic Republic's booming demand for electricity.

But the United States and the European Union doubt that Iran's atomic ambitions are entirely peaceful and are likely to ask for the UN Security Council, which can impose economic sanctions, to take up the matter, Western diplomats said.

Western powers had called on Iran to refrain from any work that could help it develop atomic weapons.

"Iran's nuclear research centers have restarted their activities," Mohammad Saeedi, deputy head of Iran's Atomic Energy Organization, told state television.

He said work at the research facilities would be under the supervision of the UN nuclear watchdog.

Saeedi told a news conference Iran had come to an agreement with the International Atomic Energy Agency (IAEA) nuclear watchdog on what work Teheran would do. He gave no details.

EU: 'Step in the wrong direction'
 
The IAEA in Vienna confirmed Iran was removing UN seals at Natanz, an underground plant in central Iran.

"The Iranians have begun removing seals at Natanz in the presence of IAEA inspectors," said IAEA spokeswoman Melissa Fleming.

The European Union was quick to denounce Iran's move.

"This is very much a step in the wrong direction. We are extremely concerned and consultations are taking place (within the EU) to coordinate a response," said Cristina Gallach, spokeswoman for EU foreign policy chief Javier Solana.

A spokesman for Britain's Foreign Office condemned the move, saying it jeopardized hopes of further negotiations.

French President Jacques Chirac said both Iran and the Democratic People's Republic of Korea have to co-operate with the international community. "These countries would commit a serious error by not accepting the hand we are holding out to them," he said.

Russia, which is helping Iran build a nuclear power station, said Teheran should abide by international commitments and that its decision to resume research caused concern.

China said it hopes the dispute could still be solved within the IAEA. Foreign Ministry spokesman Kong Quan said China backed a renewal of the moribund talks between Iran and the EU.

It is unclear if Iran will simply test equipment or actually produce small amounts of nuclear fuel in a laboratory environment. The IAEA was unable to provide details about any of work the Iranians were undertaking.

A Western diplomat close to the IAEA said agency inspectors were at Natanz and anything the Iranians did there would be noticed and reported to the IAEA board of governors. "The facility is fully safeguarded," the diplomat said.

However, Saeedi denied any suggestion that Iran was resuming the production of nuclear fuel at the Natanz facility.

(China Daily January 11, 2006)