Iran warned on Wednesday that its policy of increased cooperation with the UN atomic watchdog would be at risk if a third set of UN sanctions were imposed on the Islamic republic.

" We have taken a very important step, and if there is an illogical step then we will reconsider this strategy," Iran's top nuclear negotiator Ali Larijani told reporters.

Iran is currently answering outstanding questions from the International Atomic Energy Agency (IAEA) over its nuclear drive, which the United States claims is aimed at making nuclear weapons.

Asked to expand on these comments, Larijani indicated that Iran's current readiness to answer the IAEA's questions would cease if sanctions were imposed.

" This means that our current cooperation with the agency will be in danger and this will not be as it is now. We would go back to how things were in the past," he said.

The UN Security Council has issued two sanctions resolutions against Tehran for its refusal to suspend uranium enrichment, a process that can be used to make nuclear weapons and Western powers have warned of more action.

Larijani also reaffirmed Tehran's refusal to halt sensitive nuclear activities as demanded by the Security Council, saying such a suspension belonged to the past.

" We have already made our position clear on (suspending) uranium enrichment," he said.

" We say that new possibilities should be explored... and we should not go back on the past," added Larijani, referring to a temporary suspension of enrichment agreed under the previous Iranian government.

The comments came as the IAEA's 35-nation board of governors meeting in Vienna discussed a report from the agency's chief Mohamed ElBaradei on the Iranian nuclear program.

" We will respond to any (hostile) measures and there will be a total shift in our strategy. If they make a mistake, Iran's approach will change," Larijani warned.

Iran vehemently denies the allegations it is seeking an atomic weapon, saying its nuclear drive is aimed at providing electricity for a growing population whose fossil fuels will one day run out.