London, Feb. 9 (ANI): Iran has notified the UN that it would begin enriching its existing nuclear fuel stockpile, a step that could move the Islamic republic a step closer to nuclear weapons capability and international sanctions.

The announcement has caused international alarm and renewed Western calls for new sanctions on Tehran despite opposition from China, which insists that negotiations could still succeed, The Times reports.

As part of the UN backed-uranium swap deal, Iran was required to ship out three quarters of its low-enriched uranium stocks - at a purity of 3.5 per cent - in return for an equivalent amount of 20 per cent enriched uranium to be used in a research reactor to produce medical isotopes.

Iran, now, has told the International Atomic Energy Agency (IAEA) that it would begin the high-enrichment itself.

Since Iran lacks the technology to make the fuel rods it could not use the enriched material for medical purposes, raising suspicions that it is seeking to produce 90 per cent enriched weapons-grade fuel.

France and Argentina are the only countries capable of making the rods and Argentina has refused to help.

Last week, President Mohammad Ahmadinejad had announced that Iran was ready to sign the deal, but the declaration ultimately failed over the refusal by Iran to adhere to the conditions put forward by the IAEA.

The battle now moves to the UN Security Council, where Western powers hope to lure Russia and China on board for sanctions on the Iranian Central Bank and other financial institutions, as well as companies controlled by the elite Revolutionary Guard.

US Defence Secretary Robert Gates said the point of sanctions was to pressure Iran back to the negotiating table and warned of the consequences of failing to do so.

We have to face the reality that if Iran continues and develops nuclear weapons it almost certainly will provoke nuclear proliferation in the Middle East. This is a huge danger, he said. (ANI)