In a joint statement, Britain, France, Germany and the US said they "condemn this measure that further aggravates the continued escalation of the Iranian nuclear programme," adding that "Iran's production of highly enriched uranium has no credible civilian justification".

The statement came two days after the International Atomic Energy Agency released a report saying Iran "increased its production of highly enriched uranium, reversing a previous output reduction from mid-2023."

Iran had increased its output of 60 percent enriched uranium to a rate of about nine kilograms (20 pounds) a month since the end of November, the UN watchdog said.

That is up from about three kilograms a month since June, and a return to the nine kilograms a month it was producing during the first half of 2023.

In their statement on Thursday, the Western powers said that "these developments constitute a step in a bad direction on the part of Iran", warning of "significant proliferation risks".

"These decisions show the absence of will on the part of Iran to engage in a de-escalation in good faith and result in irresponsible behaviour in the context of regional tensions," the statement said.

Responding to the IAEA report, Iran's top nuclear official Mohammad Eslami said: "We have done nothing new and our activity is according to the regulations".

Enrichment levels of around 90 percent are required for use in a nuclear weapon.

Iran appeared to have slowed its enrichment as a gesture while informal talks for a restored nuclear agreement resumed with the United States.

But animosity between the two countries has intensified in recent months, with each accusing the other of exacerbating the war between Israel and Hamas.

Iran suspended its compliance with limits on its nuclear activities set by a 2015 nuclear deal with major powers a year after then US president Donald Trump unilaterally pulled out of the agreement in 2018 and reimposed sweeping sanctions.

It has since built up its stocks of enriched uranium to 22 times the level permitted under the deal, according to a confidential IAEA report seen by AFP last month.

Iran has consistently denied any ambition to develop a nuclear weapons capability, insisting that its activities are entirely peaceful.