Iran has agreed to ship low enriched uranium to Turkey, but has said it will still continue to enrich uranium to up to 20 per cent.

After talks with Brazil and Turkey, Iran has agreed to exchange Iran’s stocks of enriched uranium in exchange for nuclear fuel rods, for use in scientific research.

Although nuclear weapons need uranium enriched to 90 per cent, the deal deprives Iran of its current stocks of enriched uranium, which could be used in future bomb production. Fuel rods cannot be processed any further than their current state.

But Iran has said it needs to continue to enrich uranium to 20 per cent because a cancer research reactor that produces isotopes for patients is running out of fuel.

Foreign Office minister Alistair Burt said that Britain was not convinced by the move. He said in a statement: "Reports suggest Iran is now willing to ship out some amount of low enriched uranium. If this is the case Iran should convey this immediately to the International Atomic Energy Agency.

"Iran's actions remain a serious cause for concern in particular its refusal to meet for discussions of its nuclear program, or cooperate fully with the IAEA, and its decision to start enriching Low Enriched Uranium to 20 per cent."

He added: "[Iranian Foreign Minister Manouchehr] Mottaki told UN Security Council Ambassadors last week that this enrichment would continue regardless of any deal. There is no apparent civilian use for this material and it underlines Iran's disregard for efforts to engage it in serious negotiation.

"Iran has an obligation to assure the international community of its peaceful intentions. The IAEA has said it is unable to verify this."

Negotiations led by Germany with the five permanent UN Security Council members — the US, Britain, France, Russia and China — which had wanted Iran to store enriched uranium in France and Russia — had so far failed to provide any solution.

The deal between Brazilian President Luiz da Silva, Turkish Prime Minister Recep Tayyip Erdogan and Iranian President Mahmoud Ahmadinejad, has not yet had been approved by the US.

A spokesman from the US State Department called the move a “stalling tactic” and an attempt to get other countries to “front the fuel for Iran”.

The US has repeatedly called for sanctions against the country.