The Prime Minister said the British military presence would be pushed to its "highest level" to keep up pressure on the Taliban.

Speaking at a press conference with the US President in London, Mr Brown thanked him for the "steadfastness and resolution that he has shown in rooting out terrorism in all parts of the world". Mr Bush was a "true friend of Britain", he added.

The Prime Minister admitted there was "still work to be done" in Iraq but insisted Britain's policy was continuing to show success.

He said the message from the two leaders to the Iranian people was they did not have to choose a "path of confrontation" with the West.

Britain wanted to do "everything possible" to maintain dialogue with Tehran.

"But we are also clear that if Iran continues to ignore (United Nations) resolutions, to ignore our offers of partnership, we have no choice but to intensify sanctions."

He said Britain would urge Europe to impose "further sanctions" on Iran.

Action would be taken to seize the overseas assets of the country's biggest bank and a new phase of sanctions would start on oil and gas.

"I will repeat that we will take any necessary action so that Iran is aware of the choice it has to make to start to play its part as a full and respected member of the international community - or face further isolation."