British intelligence was behind the US' altered assessment of Iran's nuclear intentions, the Guardian newspaper claims.

On Tuesday a new US national intelligence estimate (NIE) said it believed Iran had ceased its active pursuit of a nuclear weapons capability in 2003, contradicting its previous belief that Iran was interested in an atomic bomb.

According to the Guardian a Washington source, speaking on condition of anonymity, said GCHQ intercepted Iranian communications on which the intelligence was eventually based.

The source also alleges a substantial time-gap existed between the intercepts being received and verification taking place.

US president George Bush said on Tuesday that a "great discovery" lay behind the NIE's change of heart.

"They've analysed the discovery and its now part of our government policy," he added, brushing off criticisms that he continued attacking Tehran on the nuclear issue despite having his administration having received the intelligence before the publication of the NIE.

"The Iranian people must understand that the tone and actions of their government are that which is isolating them," he said.

"There's a better way forward for the Iranian people than one in which they find themselves isolated in the world. Their economy can be stronger. But their leadership is going to have to understand that defiance, and hiding programmes and defying [UN nuclear watchdog] IAEA is not the way forward."

Iranian president Mahmoud Ahmadinejad has called the latest NIE a "victory" for his country.
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