"Iran is a test case for this new philosophy of the right to civil nuclear power with sanctions for rule breakers," Brown said, adding it had "the same absolute right to a peaceful civil nuclear programme as any other country.
"Indeed the UK and the international community stand ready to help Iran achieve it," he said.
"We have to create a new international system to help non-nuclear states acquire the new sources of energy they need, because, whether we like it or not, we will not meet the challenges of climate change without the far wider use of civil nuclear power," he said.
Brown, however, said Iran's "current nuclear programme is unacceptable".
"Iran has concealed nuclear activities, refused to co-operate with the IAEA (International Atomic Energy Agency), and flouted UN Security Council resolutions."
"Iran therefore faces a clear choice - continue in this way and face further and tougher sanctions, or change to a UN-overseen civil nuclear energy programme that will bring the greatest benefits to its citizens.
The United States and the Europen Union fear that Iran plans to develop nuclear weapons, a charge Tehran has denied.
Obama's administration has raised the prospect of talks with Iran, an offer which has been met with a mixed response from Tehran.
Sanctions have also failed to slow Iran's nuclear activities, with US and Israeli officials believing the country has enough fissile material to produce an atomic bomb.