Britain will clear $530m debt to Iran 'within the coming days,' says Iranian ambassador

Britain will soon clear a decades-old debt owed to Iran of around $530 million, Iran's UK ambassador said on Friday, stressing that the payment was not connected to the detention of an Iranian-British charity worker.

"An outstanding debt owed by the U.K. to Tehran will be transferred to the Central Bank of Iran in the coming days. The payment ... has nothing to do with Nazanin Zaghari-Ratcliffe's case," ambassador Hamid Baeidinejad said on his Telegram feed.

Zaghari-Ratcliffe, an employee of the Thomson Reuters Foundation, was arrested in Tehran in April 2016 after visiting for a family holiday.

Iranian authorities claim that she was plotting against the country's government and sentenced her to five years in prison. 

The money owed by the UK is part of a payment of £650 million made by Iran in the 1970s to buy 1,500 Chieftain tanks from Britain and repair 250 more.

After the US-backed Shah was deposed in 1979, the deal was blocked and Britain kept the money.

Britain was ordered by the International Chamber of Commerce in 2009 to repay Iran, however UN and EU sanctions prevented the debt's settlement.

On Thursday, The Telegraph newspaper reported that the UK was arranging for the debt to be paid in a bid to secure Zaghari-Ratcliffe's release.

A spokesman for British Prime Minister Theresa May denied that the debt had any connection to Zaghari-Ratcliffe's case.

Many Western governments, including Britain, follow a policy of not paying ransoms, however governments have in the past been accused of paying cash to free hostages or political prisoners.

In 2016, former US president Barack Obama was accused of paying a ransom to Iran for the release of five US prisoners in Iran. The controversial $400 million cash payment was delivered to Tehran by a plane laden with pallets of cash on the same day that the detainees were freed.