If the EU does not respond in time, Iran is ready to restart work at a uranium conversion plant near the central city of Isfahan later on Monday, a government official said.

He said Iran had sent a letter informing the UN nuclear watchdog of its intention.

Iran set a similar deadline on Sunday that the EU did not meet.

The EU said it had never agreed to a deadline and had told Iran "full and detailed proposals" would be delivered in a week.

"This is the last day that the Europeans can offer their proposals," Foreign Ministry spokesman Hamid Reza Asefi told reporters.

He added EU diplomats had until 5pm (1230 GMT) to hand over their package of proposals.

The EU and the United States suspect Iran is trying to build a nuclear arsenal and say if Iran resumes uranium conversion or enrichment, they will start the process that could lead to UN sanctions.

Sanctions

The European Union said on Sunday that a resumption of work at the Isfahan plant would be "unnecessary and damaging".

Iran says it is ready to resume
uranium conversion work

It said it could derail talks over the package of economic and political incentives it intended to offer Tehran in return for Iran's indefinite suspension of nuclear fuel activities.

The EU, represented by Britain, France and Germany, has said if Iran resumes work at Isfahan, as a first step it will urgently consult the board of the IAEA.

The UN's nuclear watchdog can recommend referring Iran to the UN Security Council, which can decide whether to impose sanctions.

Nothing to fear

Iran says it has nothing to fear from referral to the UN, where permanent Security Council members Russia and China, both of which have close trade ties with the Islamic republic, could veto sanctions.

The conversion plant near the central city of Isfahan takes processed uranium ore, mined in Iran's central desert, and turns it into uranium hexafluoride gas.

This gas can be pumped into centrifuges that spin at supersonic speed to enrich uranium.

Enriched uranium is used in nuclear power plants but if highly enriched can be used in atomic weaponry.