REUTERS: Foreign Secretary Margaret Beckett warned Iran on Wednesday that its persistent refusal to negotiate on nuclear issues was not a 'cost-free option'.

Beckett said she was confident that leading world powers could jointly resist Tehran's nuclear ambitions, despite criticism that existing United Nations sanctions are ineffective and watered down following pressure from Russia and China.

MARGARET BECKETT: 'We would like (Iran) to come into peaceful negotiation. At present the government in Tehran continues to say that they will not do so. But so far they have regarded this as a cost-free option - and it isn't.'

REUTERS: Tehran said on Monday it was pressing ahead with a plan to achieve industrial-scale production of nuclear fuel. Western states believe Iran is using a civilian nuclear programme as cover for plans to acquire nuclear arms and demand Tehran cease production of nuclear fuel. Tehran denies the charge.

Beckett said she believed Iran was feeling the impact of the unanimous backing given to current United Nations sanctions.

MARGARET BECKETT: 'The government of Iran assumed that the international community would not remain united. It didn't think we could get the resolution on sanctions before Christmas. But we have - and we got it with unanimity. I think that reality is beginning to be recognised."

"The Russians and the Chinese are as concerned about the possibility of proliferation of nuclear weapons and the spread of nuclear weapons to Iran as everybody else."

REUTERS: Britain was part of the 'EU3' along with France and Germany which broke off 2-1/2 years of talks aimed at persuading Iran to suspend enrichment last year. It later joined forces with the United States, China and Russia to offer Iran incentives if it froze all nuclear fuel work, but Tehran rejected the offer.

The sanctions resolution bans transfers of sensitive nuclear materials to Iran as well as technical aid from the International Atomic Energy Agency if it has any possible application in producing nuclear fuel.

Diplomats said on Wednesday Iran had invited envoys from developing nations accredited to the U.N. nuclear watchdog to visit its nuclear sites in a show of openness.

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