LONDON - Foreign Secretary David Miliband denied any split with China over Iran on Tuesday and gave a strong hint that Britain backed more financial sanctions against Tehran over its nuclear programme.

Britain and five other powers discussed prospects of further sanctions in New York on Saturday, but China sent only a mid-ranking diplomat to the meeting and made clear it opposed more punitive action at the moment, participants said.

Miliband told parliament it would not be wise to speak publicly about the sanctions being considered.

For example, he said, when one is considering financial sanctions it doesn't make sense to give six, eight, 10 weeks' notice to some of the entities that might be involved of the sort of financial sanctions that might be coming in.

Britain believed financial sanctions had an important role to play in exerting pressure at the appropriate points in the regime and not affecting the Iranian people, he said.

The United Nations Security Council has already imposed some financial curbs on Iran as part of three rounds of sanctions.

Britain said last June it had frozen nearly one billion pounds' ($1.64 billion) worth of Iranian assets under U.N. or European Union sanctions.

Washington and its western allies accuse Iran of trying to develop nuclear weapons under cover of its civilian atomic programme. Iran says the programme is designed to generate electricity so it can export more of its valuable oil and gas.

Miliband denied the rest of the six-power group known as the E3+3 were at odds with China over Iran.

All six countries (at Saturday's meeting) agreed that now was the time to assess which of the sanctions options were the right ones to implement, he said.

At no stage was there any suggestion from the Chinese that they want to opt out of the E3+3 unity or that they want to deny the progress that needs to be made, Miliband said.

China urged other powers on Tuesday to show more flexibility in dealing with Iran's nuclear programme, playing down prospects of sanctions [ID:nTOE60I08Q].

Iran's failure to respond positively to the six powers' overtures or to a proposal to transfer stocks of low-enriched uranium abroad in return for fuel for a medical research reactor means we do have to look at a sanctions package, Miliband said.

He denied there was no prospect of achieving a further U.N. Security Council resolution on Iran for several months. I think it will take some time but I don't believe this can be or should be or will be punted into the long grass, he said.

Asked if the Middle East was sleep-walking towards war over Iran, Miliband said he had faith in a diplomatic resolution.

We must not talk ourselves into -- (you) used the word 'war' -- that's a very dangerous word to use, especially in the Middle East, and I think it is quite the wrong time to believe that diplomacy cannot resolve this issue, he said.

We are absolutely committed to the diplomatic track and believe that it can work, he said.
Saturday's meeting came after Iran ignored U.S. President Barack Obama's December 31, 2009, deadline to respond to an offer from the six powers of economic and political incentives in exchange for halting its nuclear enrichment programme.

(Editing by Andrew Roche)