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In a surprising move on Wednesday, Iran announced the unconditional release of the 15 British sailors which it has detained for 13 days. 

Iranian President Mahmoud Ahmadinejad said the move was as a "gift" to Britain.

"While we insist on our rights, the 15 sailors have been pardoned and we offer their freedom to the British people," Iranian President Mahmoud Ahmadinejad told a news conference in Tehran, broadcast live on Iranian television.

"After the press conference, they will be sent to the airport to take a flight to their own country," he added.

However, Iran's official IRNA news agency was later seen to quote "an informed source" as saying that the British naval personnel would fly out from Tehran on Thursday morning.

Shortly after the press conference, Ahmadinejad attended a "ceremony" in his presidential compound marking the release of the 15 British sailors' release, Iran's state television reported. The footage showed the president talking with the British sailors and shaking their hands.

The crisis began when Iranian forces arrested the 15 British naval personnel on March 23 for an "incursion" into its territorial waters. Britain has steadfastly denied this claim, saying its soldiers were in Iraqi territorial waters.

At the press conference on Wednesday, Ahmadinejad stated that no deal had been made with Britain on the issue and that the move was "a gift" from the Iranian people to Britain. However, Ahmadinejad added that the British government had written a letter, pledging to never let the incident be repeated.

Iran's state television also reported that the 15 British sailors and marines were watching the live broadcast and had applauded upon hearing about their release.

The same press conference saw the officer responsible for leading the mission which rounded up the British troops be rewarded for his bravery.

"Here I want to thank with a medal of third-rank bravery to the commander of the forces who defended Iran's borders and arrested the trespassers," Ahmadinejad told the reporters, before presenting the medal to Abulghasem Amanghah, Islamic Revolutionary Guards naval commander.

British Prime Minister Tony Blair hailed the news, saying that Britain respects Iran's "proud and dignified history."

"I'm glad that our 15 service personnel have been released and I know this will come as a relief not just to them but to their families that have endured such stress and anxiety," he said in a statement.

The White House said President George W. Bush also spoke of his pleasure at the news.

Iranian and British officials had involved in a complex diplomatic rigamarole over the last 48 hours to defuse the crisis.

With the world's spotlight on him, Ahmadinejad spoke of his willingness to re-establish ties with the US should it "change its behaviour" but declined to expound further on the statement.

Iran's official news agency said British Prime Minister Tony Blair's advisor Nigel Sheinwald had spoken directly to Ali Larijani, secretary of Iran's Supreme National Security Council, on Tuesday night, which had seen a breakthrough.

Blair's office said there had been direct talks with Larijani but declined to confirm Sheinwald's part within them.

(Xinhua News Agency April 5, 2007)