LINKING the fate of Nazanin Zaghari-Ratcliffe and a historical debt to Iran is “beyond the pale”, Tory former chancellor Lord Lamont has said.

The Conservative peer levelled his criticism of the Tehran regime at Westminster as the UK Government said it would never accept UK citizens being used as “diplomatic leverage” and it was neither “helpful or right to conflate different issues”.

Ministers also repeated condemnation of Iran’s decision to continue with a new “wholly arbitrary case” against the British-Iranian mother-of-one - whose sister-in-law Rebecca Ratcliffe is a GP in Cwmbran - and called for her return to Britain.

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The House of Lords heard Boris Johnson had raised the case of Mrs Zaghari-Ratcliffe with the Iranian President Hassan Rouhani most recently on March 10 while foreign secretary Dominic Raab continued to engage with his counterpart.

The 42-year-old, who was detained in 2016, completed a five-year sentence earlier this month in Tehran on widely refuted spying charges.

The latter part was spent under house arrest due to the Covid-19 pandemic.

However, she now faces further uncertainty as she waits the outcome of a second court case.

Many have linked her case to a long-standing debt.

The UK is thought to owe Iran as much as £400 million over the non-delivery of tanks in 1979, with the shipment stopped because of the Islamic revolution.

Ministers said Britain continued to “explore options” to resolve the dispute but insisted the “two issues cannot be merged into one”.

Voicing his concern in Parliament, Lord Lamont, who is chairman of the British-Iranian Chamber of Commerce, said: “Would the minister agree that even if Iran has a justified sense of grievance over the unpaid tank money – the £400 million – it is beyond the pale for a civilised country to try to make a link between the fate of Nazanin Zaghari-Ratcliffe and a financial argument?

“Does the minister remember that when President Rouhani first took office in his first speech he said he wanted to demonstrate to the world the rational face of Iran and the compassionate face of Islam?

“Isn’t it time now at the beginning of the Iranian new year – Nowruz – for those qualities to be made a reality?”

Responding, foreign minister Lord Goldsmith of Richmond said: “Compassion is certainly not a word that could be used to describe the manner in which this British subject has been treated.

“The UK does not and never will accept our dual-nationals being used as diplomatic leverage, under any circumstances.”

On the issue of the pre-revolution debt, Lord Goldsmith said: “We continue to explore options to resolve this case. The two issues cannot be merged into one.”

He added: “Iran continues to put Nazanin through a cruel and intolerable ordeal. She must be allowed to return permanently to her family in the UK.”

Tory former minister Lord Robathan stressed the “appalling case” was “entirely the fault of the Iranian government”.

Lord Goldsmith said: “It remains completely in Iran’s gift to do the right thing.

“We do not believe it is helpful or right to conflate different issues or enable Iran to justify Iran holding our citizens as collateral in the pursuit of other aims.”