The head of Iran's atomic energy organisation reaffirmed Iran's ultimate aim of installing 50,000 centrifuges to enrich uranium at the Natanz nuclear plant, a figure that would mark a colossal step up from its current capacities.

"The objective of the Islamic Republic of Iran is not just the installation of 3,000 centrifuges at the Natanz plant but we are doing everything to install 50,000 centrifuges," said Gholam Reza Aghazadeh.

"We have entered into the industrial phase and the installation of machines will continue until we reach 50,000 centrifuges," he added, according to the state-run IRNA agency.

In a grand ceremony at its Natanz uranium enrichment plant in central Iran on Monday, President Mahmoud Ahmadinejad announced that the country was now able to enrich uranium on an industrial scale.

Enrichment of uranium is the key sticking point in the standoff between Iran and the West as the process can produce nuclear fuel but in highly extended form can also make the fissile core for an atomic bomb.

Iran insists its nuclear drive is solely aimed at generating energy.

However Ahmadinejad did not give figures on how far the Iranian nuclear programme has advanced and Iran's progress towards its medium term goal of installing 3,000 centrifuges was unclear.

Nonetheless the United States, Iran's arch enemy which accuses it of seeking nuclear weapon and has not ruled out a military attack on the Islamic republic, lost little time in voicing its worries.

"We are very concerned about Iran's announcement that they entered an 'industrial stage' of nuclear fuel production," national security spokesman Gordon Johndroe told reporters.

A British Foreign Office spokesman echoed its ally's stance, describing Ahmadinejad's announcement as a "further breach" of UN resolutions while the European Union renewed its calls for Iran to suspend enrichment.

UN chief Ban Ki-moon said: "It is very important for any member country to fully comply with Security Council resolutions. I urge the Iranian government to do so."

A team of inspectors from the UN's atomic watchdog meanwhile arrived in Iran on a routine pre-planned week-long visit that will see them visit the Natanz nuclear plant, the Fars news agency reported.

The increased tensions come just days after a potentially explosive crisis with London was defused when Tehran announced it had released 15 British sailors arrested on accusations of trespassing in its waters.

Iran's defiance of Western calls for it to suspend enrichment have already earned it two sets of UN sanctions but Tehran appeared to be in no mood to halt the sensitive process.

"The suspension of enrichment is not acceptable either as a precondition to negotiations or as a result of such talks," Foreign Minister Manouchehr Mottaki told reporters.

"We are ready for dialogue (with world powers) if they have something new to say. The other party must accept the new reality," he added.

Parliament speaker Gholam Ali Hadad Adel indicated that even the threat of further UN sanctions would not deter Iran from its nuclear drive.

"When the Iranian people master a science, they cannot be deprived of this by sanctions," he said, according to IRNA.

"If the world wants to wait for the trust of the United States, this could take 100 years. We are no longer in the colonialist 19th century and Iran of today is not the same as Iran before the Islamic revolution."

Aghazadeh meanwhile explained Tehran's reluctance to give any figures over the progress of its nuclear programme by saying it did not want to create "ambiguities".

"I did not want people to say that Iran has finished installing 3,000 centrifuges and everything has been completed now," he explained.