Britain denies link between debt to Iran and prisoner

The debt dates back to an arms contract for which Britain had received an advance payment from Iran but which was halted by the 1979 Iranian Revolution.

The money is being held in a frozen bank account in Britain, but sending the funds to Iran is complicated because of European Union and US sanctions on the country.

Separately, British Foreign Secretary Boris Johnson has vowed to make every effort to secure the release of Nazanin Zaghari-Ratcliffe, who was imprisoned 19 months ago on charges of sedition after he was criticised for potentially jeapordising her case.

The Daily Telegraph cited diplomats saying that repayment of the debt could speed up her release from jail.

The newspaper also quoted two senior government sources voicing concern that Zaghari-Ratcliffe was being held as "collateral" to get the money released.

But a spokesman for Prime Minister Theresa May told reporters: "We don't see any link between these two issues."

Iranian foreign ministry spokesman Bahram Ghassemi also denied any link in comments to Iran's IRNA state news agency.

"The case of Mrs Nazanin Zaghari and the repayment of this debt are two distinct issues and there is no connection between them," he said.

The money 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 Shah was deposed in 1979, the deal was blocked and Britain kept the money.

Zaghari-Ratcliffe, a British-Iranian dual national who works for the Thomson Reuters Foundation - the media organisation's philanthropic arm - was arrested at Tehran airport in April 2016.

She is now serving a five-year jail sentence for alleged sedition, and has been threatened with further charges and a new trial that could double her sentence. She denies all charges and insists she was in Iran solely for a holiday with her daughter.