The hardline Iranian president has said he will free the 15 captured British sailors detained in his country.
In a lengthy and theatrical press conference in Tehran, Mahmoud Ahmadinejad said that he would pardon the 14 men and one woman as a "gift" to the British people.
But he maintained Iran's stance that the Royal Navy personnel had been detained in Iranian waters, something the British government has categorically denied.
When asked when the Britons would be released, Mr Ahmadinejad said, according to a translator, it would happen soon after the conference.
Later a presidential adviser said the sailors would be handed over to the British embassy on Thursday when it is thought they will leave for London, according to Iran's Mehr news agency.
Despite the apparent pardon, the Iranian president attacked British prime minister Tony Blair for the way he has acted since the 15 were captured in the Gulf on March 23rd.
"I ask Mr Blair to think about the justice, to think about the truth and to work for the British people and not for himself," Mr Ahmadinejad said, according to the translation.
He also praised the Iranian border guards who arrested the Britons and bestowed upon them medals of honour for their "bravery [against] British violators".
The British Ministry of Defence has released data it says proves that the military personnel were in Iraqi waters working under a United Nations mandate and have constantly denied Tehran's claims throughout the crisis.
But Mr Ahmadinejad said the Blair administration had refused to "admit it had made a mistake" and also questioned why a woman and mother, Leading Seaman Faye Turney, was involved in the military operations.
Following the press conference, the Foreign Office said it was looking into what had been said.
A Downing Street spokesperson said: "We welcome what's been said about the release of our personnel."
Number 10 added that it now needed to "establish what it means in terms of the method and timing of their release".
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