"We expect Iran to honour its obligations, and we have tried to find a way through the impasse over nuclear capabilities," Blair told a press conference after ultra-conservative Ahmadinejad swept Iran's presidential elections.

"It would be a serious mistake if he (Ahmadinejad) thought that we are going to go soft on them," he added, "because we are not."

Iran was quick on Sunday to try to dispel fears its new president could doom nuclear talks with the European Union, with a foreign ministry spokesman saying Tehran's position "will not change with the change of a president".

Iran has frozen its fuel cycle work and has entered into talks with Britain, France and Germany, who are trying to convince Iran to abandon such activities altogether in a "Libya-style deal" that offers incentives in return.

The next round of talks is scheduled for late July when the Europeans are obliged to put forward a proposal for a deal.

Blair, preparing for next week's summit of the Group of Eight leading industrialised countries, said the world will "watch very closely what is happening with the new Iranian president".

"We expect Iran to honour its obligations and we have tried to find a way through the impasse over nuclear capabilities," he said. "But we need a willing partner on the other side."

Ahmadinejad pledged Sunday to form a government of "moderation", saying Tehran would continue talks over its nuclear programme and reach out to the international community.

Blair's remarks -- ahead of the start Friday of the British presidency of the European Union -- broadly echoed a statement in Brussels on Monday from EU foreign policy chief Javier Solana.

"We don't have any reason to change at this point of time," said Solana, who has joined the so-called "E-3" of France, Germany and Britain engaged in nuclear negotiations with Tehran.

"At this point I am just in a waiting mood. I want to wait and see the actions," said Solana, who also expressed "doubts" about the conduct of the elections -- a concern shared by the European Commission.

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