EU agrees to take Iran group off terror list

The official confirmed EU foreign ministers approved a decision to remove it from a list that includes Palestinian Hamas and Sri Lanka's Tamil Tigers. The decision follows a number of court rulings against its inclusion on the blacklist.

"What we are doing today is abiding by the resolution of the European court," EU foreign policy chief Javier Solana told reporters just before the ministers finalized the decision.

The PMOI is the group which exposed Iran's covert nuclear programme in 2002. It began as a leftist-Islamist opposition to the late Shah of Iran and has bases in Iraq.

Western analysts say its support in Iran is limited because of its collaboration with Iraq during the 1980-88 Iran-Iraq war. It remains banned in the United States.

The decision means that the PMOI will now be able to raise funds in Europe, but may not be the end of a years-long saga.

France announced last week an appeal against the December judgment of the European Court of First Instance which called for the delisting of the group, and EU officials stress that court ruling was based on procedure rather than substance.

"This does not mean the court does not think the PMOI is a terrorist group," one EU official said. "We are taking it out for procedural reasons."

PMOI allies have repeatedly accused the EU -- which has led efforts to persuade Iran to curb a nuclear programme suspected as a cover for the atom bomb -- of seeking to "appease" Tehran by keeping the group blacklisted.

British Foreign Secretary David Miliband insisted that the delisting of the PMOI should have no effect on international diplomacy aimed at persuading Tehran to curb uranium enrichment.

"We have to find a way to respect the court judgment ... I think the Iranian standoff with the IAEA (International Atomic Energy Agency) is very clear. During 2009 there will and should be significant focus on this issue.