IRAN last night said there would be no need for a trial of the 15 military captives, signalling a lowering of the temperature in the dispute with Britain.
One of Iran's most powerful figures - Dr Ali Larijani, secretary of Iran's Supreme National Security Council - set out the regime's demands in exchange for a diplomatic resolution to the 12 day-long stand off.
Both sides yesterday moved away from public confrontation to private negotiation.
Hopes were raised as Dr Larijani said Tehran wanted the crisis resolved through diplomacy.
"We definitely believe this can be resolved," he told Channel 4 News via an interpreter. "There is no need for any trial any more.
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Iran's priority "is to solve the problem through proper diplomatic channels", he said.
However, Dr Larijani insisted that Britain had "violated" its territory, adding that Iran was "not in the stone age" and did possess GPS technology to prove its case.
He also called for an independent delegation to resolve the dispute over whether the British crew had been in Iraqi or Iranian waters at the time of their kidnap.
Sending a clear signal that he expected Britain to apologise, he called on the government to be "brave" enough to admit its mistake.
The Foreign Office last night said that diplomatic contacts with Tehran were continuing.
Apart from wider political clashes over Iran's nuclear capabilities, negotiations for the crew's release have also been slowed by the Iranian New Year.
But a press conference today with the president, Mahmoud Ahmandinejad, is expected to clarify the regime's position further.
Meanwhile, Downing Street admitted there was a lot going on "behind the scenes", as there was confirmation that a letter had been sent to the Iranians outlining how future disputes in the contentious Persian Gulf could be avoided.
An Iranian television report welcomed a so-called change in Britain's stance, away from the very public attempts to isolate Iran.
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"If this path continues, one can hope that the issue would be resolved in a bilateral process and far away from fuss and clamour and with achieving Iran's logical demands," state-run TV said.
Karim Sadjadpour, an Iran expert at the Carnegie Endowment for International Peace in Washington, told The Scotsman that Iran would not want a serious confrontation.
"They just want to show the West that this approach of pressure is not going to work and Iran can reciprocate. That's why you see this schizophrenic mood in Tehran. On the one hand they want to make it clear they're not going to be put under pressure and on the other that they don't want a confrontation.
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• A former American FBI agent has gone missing in Iran while on private business there, the US state department said last night.
The United States said it was sending an official inquiry to Iran via Swiss diplomats, who act as a go-between with Tehran because the two countries do not have diplomatic relations.
The man is believed to have gone missing on Kish Island, off the southern coast of Iran, sometime around 11 March.
A spokesman for the state department denied any link between this incident and the detention of the 15 British sailors and marines.
What an appropriate turn of phrase Karim Sadjadpour uses 'Schitzophrenic mood in Tehran' Describes Ahmadinejad to perfection, and he wants the bomb!!
! Objective achieved, show the rest of the Muslim world that UK is a toothless Bulldog and the dog's leash can be jerked with impunity. Future events will be interesting indeed.
Shame of this is the Iranians will come out smelling like a rose, when he releases the Navy personnel. The Britd missed the opportunity to put the Iranians in their place.
Instead, they saw how unprepared the UK and the US are at taking a stand.
Now when they are released on humanitarian grounds, the rest of the world will see how good they are!!
The PR war is one by the Iranians.
How sick!!!
As I stated in past postings, the British Captives will be released when the Iranian Leader feels he has sufficiently humiliated and humbled the British to the degree that he thinks they are the laughing Stock of the World, as Iran has really enjoyed this World Media Attention. Kind of reminds me when Bagdad Bob was broadcasting, but things just didn't go his way when the TV Station blew up..
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Like leading a pet on a leash, Iran has had their way once again. Unless the mood changes I believe they are getting bored waiting for a British response.
Kind of like Like wearing a new pair of clothes, they get old after the first wash...
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It's a shame the poor families of these hostages have had to go on this roller coaster ride. I guess it could be worse as it was in 1979 when the Iranian Guard stole the bodies of our honorable soldiers and drug them though the streets of Tehran.
What is a Country when it loses it's Honor? Time to crawl in a hole and hide, otherwise more of the same is to come..
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#4 Quad Erat Demonstrandum!
More of the same will be on the way, as sure as the sun will come up tomorrow. That may change when Ahmadinejad gets the bomb, then it might be one bright flash of light for all of us!
Seems like they are starting to get bored with the World Response from their kidnapping activities.
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Maybe the Western World's Strength and Resolve is now being tested for the big one yet to come.
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The World is addicted to their oil. Enslaved to the Oil Masters, which will be the downfall if not corrected in a fast way.
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Lyyne # 2
No Lynne . I don’t agree. it is shameful to say that any dispute in the world must be resolved by launching an illegal war killing children and babies .
Iranians treated these sailors very humanly unlike those who were detained in Abu Gharib and Guantanamo bay .
Why don't you tell that to those Iranian Citizens who are now in Iraq and who are non-stop supplying explosives to Kill Innocent Iraq Women and Children..
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You guys are in no place to pass as a judge on any American.
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