Britain cuts ties with Iran banks

Iran's banks were today banned from using London's financial system in a crackdown designed to stop the state financing its nuclear programme.

George Osborne used counter-terrorism powers for the first time to sever all ties between British and Iranian banks.

The move could have a big impact on some City firms. The action comes after a report by the UN nuclear watchdog highlighting concern that Iran is working to obtain a nuclear weapon.

Iran has dismissed the claims as fictitious. The UN Security Council has passed a string of resolutions to make it more difficult for Iran to finance its nuclear activities.