Iran has not received £400m agreed by UK at time of Zaghari-Ratcliffe release

The historic £400m debt the UK paid to Iran at the time of the release of British-Iranian dual nationals Nazanin Zaghari-Ratcliffe and Anoosheh Ashoori has still not reached Tehran, according to Iranian government sources.Photograph: WPA/Getty Images

A senior Iranian government source said the money is blocked in Oman and the problem is not with the UK government. One report said only £1m had been transferred to Tehran.

The UK made it a condition that the money would only be used for humanitarian purposes, but this condition was not repeated in a statement at the time by the Iranian government.

Oman acted as a mediator in the talks that led to the transfer of the longstanding debt at the time of the release of the two UK detainees on 17 March. Both sides maintained that the payment of the 40-year-old debt and the release were not linked, but many said this was a diplomatic fiction.

The UK refused to comment directly on Iranian media reports but pointed to previous UK and Iranian government statements that the debt had been paid with accrued interest.

Questioned by the Iranian newspaper Entekhab, Mahmoud Abbaszadeh Meshkini, the spokesperson for the Iranian parliament’s national security and foreign policy commission, said the money was blocked. “We are working with the countries of the region in some way, and some neighbouring countries are consulting and mediating in receiving our demands,” he said. He said it was important that the blocked money is released.

The extent of the hold-up is not clear and it is unknown whether it is due to a banking problem in Oman or another issue, such as the limits set on the use of the money by the British.

The Foreign Office has stressed that the payment “was made in full compliance with UK and international sanctions and all legal obligations”. The Iranian government also said at the time that it “had full authority and freedom on how to spend its financial resources”.

There had been speculation that the UK may be withholding full release of the funds because it believes Iran has not kept its side of the negotiated bargain that should have allowed a third British-Iranian, Morad Tabhaz, indefinite leave to be on furlough at his family home in Tehran, rather than requiring him to stay in prison.

But the UK has always said there is no link between the debt and the release of the detainees, so it would be difficult for the UK to explicitly make such a link now.

Tabhaz went on a nine-day hunger strike after his return to jail, but his future now seems tied up with stalled wider talks about the revival of the Iran nuclear deal in Vienna.

Tabhaz also has US citizenship and the Iranians appeared unwilling to release him as part of the package that saw the release of Zaghari-Ratcliffe and Ashoori.

The foreign secretary, Liz Truss, thought that as a compromise she had reached an understanding that Tabhaz, an enviromentalist arrested in January 2018 and jailed for 10 years, would be allowed out of jail on furlough. However, he was returned to jail after only two days on release. The Iranians said there may have been a misunderstanding within his family.

The UK foreign affairs select committee is due to hold an inquiry into how the UK handled the detainees case, but it is not yet clear how much it will examine the issue of state hostage-taking in general or the specific handling of past consular cases by ministers and officials.

Zaghari-Ratcliffe was detained in Iran for six years. Ashoori was held in Evin prison for nearly five years. Both had been found guilty of spying by the Iranian revolutionary courts, charges that they denied.

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