Iran is demanding firmer guarantees on trade and nuclear supplies, a tighter timetable for implementing agreements and clearer security pledges from the west before it decides whether to freeze its uranium enrichment programme and explore an offer of a new relationship, according to the formal Iranian response on its nuclear activities delivered to the western diplomats last weekend.

Details of the response, disclosed to the Guardian yesterday by two well-connected Iranian political scientists, claimed moderates in Tehran had won an important power struggle and were offering a negotiated settlement of the nuclear dispute.

If Washington spurns the Iranian olive branch and forces through sanctions from the United Nations Security Council, "the stage will be set for a full-scale international crisis", the response’s authors told the paper.

Under the terms of a UN resolution the Iranians have until Thursday, August 31st, to freeze all uranium enrichment activities or face the prospect of western sanctions. The same day the head of the International Atomic Energy Agency (IAEA), Mohammed ElBaradei, is slated to tell the Security Council that Iran has not suspended uranium enrichment, the paper said. ElBaradei is also likely to report additional frustrations in the IAEA’s efforts to gain more detail on Iran’s nuclear programmes.

In June the Europeans, the US, Russia and China offered Iran an extensive package of incentives if it enacted a verifiable halt to uranium enrichment, a process that is capable of delivering uranium strong enough for use in nuclear bombs.

But the negotiations on that package – everything from the fine print of Iran-EU trade agreements to a pact on "regional security arrangements" and the details of European supplies of nuclear reactors for a civil nuclear programme – could take at least 10 years, the Guardian reported.