Iran's new allies: Bush and Blair

Nobody in London or Washington would admit it, but Tony Blair and George Bush have unwittingly become the biggest allies of Iran's clerical regime. The "war on terror" has removed two of its chief enemies: the Taliban and Saddam Hussein. Iranian allies are in power in Baghdad under US patronage and Iranian agents have infiltrated Shia militias in southern Iraq under the eyes of British troops.

True, American armies now surround Iran - but that means they are within easier reach of Iranian revolutionary guards, secret agents and Iraqi allies.

Nobody can tell for sure how far Iran was involved in stirring up the latest violence against British troops in Basra, but British security experts are sure of one thing: if things are bad now, they will get a lot worse if Tehran wants it that way. "We have asked ourselves what would happen if the Iranians were to send a division across the border into Iraq," said one British source. "The British forces on the ground would be overrun, even with US air support."

America and Britain, in other words, now depend on Iran if they are to salvage anything in Iraq - to such a degree that the Saudi foreign minister, Prince Saud al-Faisal, last month voiced the fears of much of the Arab world: "We fought a war together to keep Iran out of Iraq after Iraq was driven out of Kuwait. Now we are handing the whole country over to Iran without reason."

It was all very different two or three years ago, when the US was giving notice that it would challenge the "axis of evil" of Iraq, Iran and North Korea. As the tanks prepared to roll into Iraq, Iran agreed to open up its secret nuclear sites to international inspectors. What they found was alarming. Iran was developing the means to enrich uranium, ostensibly for civil uses but with a clear potential to make bombs. Under pressure from the European Union, Iran agreed in October 2003 to freeze the parts of the programme that could produce enriched uranium or plutonium.

But two years of insurgency in Iraq have changed the balance of power. At a recent conference at the International Institute for Strategic Studies there was much discussion of how America's "hard power" had been sapped by Iraq while Europe's "soft power" had melted because of the internal crisis over the constitution.

Shahram Chubin, an Iranian exile and director of the Geneva Centre for Security Policy, said: "With the Americans bogged down in Iraq, and oil prices at record levels, the Iranian regime knows it is not going to be invaded and now feels very confident." Iran's reformists, meanwhile, have been swept away with the election of the new hardline president, Mahmoud Ahmadinejad. In August Iran restarted a factory making uranium hexafluoride, the preliminary step in enrichment.

At the International Atomic Energy Agency on 24 September, western countries could not muster the support for an immediate referral to the UN Security Council and instead passed a resolution declaring Iran to be in "non-compliance". Russia, China and many developing countries abstained, but the compromise won the support of India.

The game of resolutions, inspections and threats may be reminiscent of the lead-up to war in Iraq, but the difference this time is that the WMD threat is real. After Iraq, even US neoconservatives understand that bombing would at best delay the nuclear programme, while at the same time strengthening the regime. And Iran's response would be felt not only in Iraq, but across the Middle East.