"We have said several times that uranium enrichment is Iran's red line and we must have this technology," Deputy Foreign Minister Ali Reza Sheikh Attar said, quoted by the state IRNA news agency.

Suspending uranium enrichment -- which the West fears could be used to make a nuclear weapon -- is the key demand in the deal offered Saturday to Tehran by EU foreign policy chief Javier Solana on behalf of world powers.

The package offers Iran talks on a package of technological and economic incentives, so long as Tehran suspends uranium enrichment.

Sheikh Attar said Iran will give the offer "an expert examination and respond as soon as possible."

The West has said its policy in seeking to end the standoff combines diplomacy with tough financial sanctions, with the European Union and United States having already imposed a wave of measures against Iran.

British Prime Minister Gordon Brown said on Monday that the EU was to agree new sanctions, including freezing the assets of a major Iranian bank, although the bloc has yet to give the final go-ahead for the measures.

Iranian foreign ministry spokesman Mohammad Ali Hosseini responded: "People and officials in our country are watchful of the other side's decisions. If they take a decision against Iran, we have options against it."

Diplomats said the EU did not agree the sanctions immediately in order to avoid unbalancing the situation and give Tehran time to consider the proposal presented by Solana.

Meanwhile, a banking official said Iran is not planning to move assets from European banks, rejecting reports it is making major withdrawals to dodge impending EU sanctions.

"No money from Iranian banks has been transferred out of European banks to Iran or other countries. And it will not be (moved)," the managing director of Bank Mellat, Ali Divandari, was quoted as saying by the Mehr news agency.

"There is no reason for the transfer of this money," said Divandari, whose bank is one of Iran's major state banks.

Several Iranian and foreign newspapers have reported that President Mahmoud Ahmadinejad ordered the transfer of billions of dollars in Iranian assets from Europe to Asia to circumvent the sanctions.

Iran, OPEC's number two producer, vehemently rejects Western allegations it is seeking nuclear weapons, saying it only wants electricity for a growing population whose fossil fuels will eventually run out.

The International Atomic Energy Agency has been investigating the nuclear drive for over five years but has never been able to conclude whether the programme is peaceful.

Even as Solana delivered the offer on Saturday, Iran's government spokesman announced that Tehran would reject any package that does not allow it to enrich uranium.

US President George W. Bush said this was tantamount to rejecting the package but both Iran and the EU have insisted the deal is still being studied.

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