At a meeting on Tuesday, EU ambassadors debated whether to implement UN Security Council Resolution 1803, agreed on March 3, in a "robust" or simply a more "literal" way when transposing it into European law, he said.

In the end they agreed to go beyond the letter of the resolution, which tightened measures aimed at persuading the Islamic republic to suspend controversial uranium enrichment.

Britain and France, in particular, "wanted to go beyond 1803 and apply the things they had to concede to Russia and China" when the resolution was drawn up, the diplomat said, on condition of anonymity.

Resolution 1803, which slapped a third set of economic and trade sanctions on Iran over a period of 15 months, was sponsored by Britain, France and Germany.

The resolution notably urges states to "exercise vigilance" in entering into new commitments for public-provided financial support for trade with Iran, including the granting of export credits.

It also urges vigilance in dealing with "all banks domiciled in Iran, in particular Bank Melli and Bank Saderat and their branches and subsidiaries based abroad."

The EU text will go further by urging European nations to exercise "restraint" in its dealings with Iran in these areas, the diplomat said.

The decision comes as major world powers wait for Iran to give its final answer to an offer of economic and technological incentives to suspend uranium enrichment.

Enrichment is a process for powering a nuclear reactor, but at highly refined levels the uranium can be used to build the core of an atom bomb, which many countries fear the Islamic Republic is trying to covertly develop.

Iran says its nuclear aims are only peaceful and has refused to sit down at the negotiating table if it has to suspend uranium enrichment even before the talks begin.

The offer, according to diplomats, could see Iran stop bringing online more uranium-enriching centrifuges, while the major powers would stop seeking further sanctions.

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