Iran confirmed that it is converting medium-enriched uranium into reactor fuel in a move that may partly allay international concerns over its nuclear stockpiles and add more time for diplomatic negotiations.

Ramin Mehmanparast, Iran’s foreign ministry spokesman, told reporters on Tuesday that some of the country’s stock of 20 per cent-enriched uranium would be committed to a facility called the Tehran research reactor, which needs fuel for medical purposes and production of radio isotopes.

Once it transfers part of its stock of more highly enriched uranium to the reactor, it is hard for the relevant stock to be used for a nuclear weapon, something western powers believe Iran is secretly committed to acquiring. Iran carried out a similar move last autumn, which also reduced tension over its programme.

“After receiving no positive answer, we decided to meet our needs domestically by enriching uranium at 20 per cent grade and converting it into fuel,” said Mr Mehmanparast, adding that Iran has reported this latest move to the International Atomic Energy Agency.

It was unclear on Tuesday how much of the fuel is being converted in this way. But the move could be significant because it may delay the moment when Tehran crosses what Israel deems a “red line” for the production of highly enriched uranium.

Benjamin Netanyahu, Israel’s prime minister, indicated last year that Israel would not tolerate a situation in which Iran produces a stockpile of 240kg of more highly enriched uranium at the concentration of 20 per cent. Mr Netanyahu implied this would put Iran in a position where it could make a very quick final dash for a nuclear bomb.

Mr Netanyahu indicated that the acquisition of a 240kg stockpile would be a trigger for Israeli military action against the Iranian programme.

A decision by Iran to convert some of that 20 per cent stock into reactor fuel would slow down this process and indicate that crossing the red line has again been delayed. Iran made a similar move last year that allayed tension over its programme.

However, western diplomats will want to put Iran’s new declaration in context. It comes at a time when Iran is also threatening to install new and more powerful centrifuge machines at its enrichment plant at Natanz. If this happens, Iran could replace stockpiles of enriched uranium very quickly.

It also comes at a time when Iran is failing to comply with the IAEA’s demands for explanation of possible military dimensions to its programme.

Iran denies any military dimensions to its nuclear programme and insists it is merely for peaceful purposes.

Some western diplomats in Tehran were already suspicious that the Islamic regime was going to show some co-operation with the IAEA to prevent the Vienna-based organisation from sending complaints to the UN Security Council over Iran’s alleged non-compliance.

“Iran hopes to play the Vienna card against the New York card,” a senior western diplomat in Tehran told the Financial Times.

Mr Mehmanparast said it would be “illogical and illegal” for the IAEA to again refer Iran to the UN Security Council.

He added that Iran was “ready to reach a comprehensive agreement” with the UN watchdog according to which “Iran’s nuclear rights under the Non-Proliferation Treaty are recognised”.

He said one of the issues that Iran could consider positively would be a visit to Parchin, a military site south of Tehran where Iran is suspected to have carried out tests of high explosives that could be used in developing nuclear weapons.

IAEA representatives are due in Tehran on Wednesday, but it is doubtful they will be granted permission to visit Parchin.

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