A British government source has downplayed reports of a £400 million deal with Iran to free jailed dual citizen Nazanin Zaghari-Ratcliffe.
Lebanese news site Al-Mayadeen quoted un-named Iranian officials who said an agreement was struck after negotiations between the two governments. Iranian news network IRINN re-reported those claims.
The talks "led to an agreement to release Nazanin Zaghari by Tehran, who is accused of spying for British intelligence, in exchange for London freeing £400 million of Iranian money," sources said.
London owes Tehran up to £400 million for an undelivered order of 1,500 Chieftain main battle tanks paid for by Shah Mohammad Reza Pahlavi in 1979, months before the Islamic Revolution that overthrew the monarchy. The UK refused to either honour the order with the new regime or refund the payment.
But the British Foreign Office said only that talks over the debt were ongoing after four decades.
"We continue to explore options to resolve this 40-year-old case and will not comment further as legal discussions are ongoing," a spokesman said.
Zaghari-Ratcliffe's family said they were unaware of any payment in return for her release, their MP for Hampstead and Kilburn Tulip Siddiq tweeted.
But British Foreign Secretary Dominic Raab agreed with the BBC's Andrew Marr on Sunday morning that the dual national was being "held hostage".
Zaghari-Ratcliffe was jailed for five years in 2016 on charges of plotting to overthrow the government. She was due to be released last week, but was sentenced to an additional year in prison for propaganda against Iran.