By Francois Murphy

VIENNA, March 4 (Reuters) – Britain, France and Germany have scrapped a U.S.-backed plan for the U.N. nuclear watchdog’s board to criticise Iran for scaling back cooperation with the agency, diplomats said on Thursday, amid concerns about efforts to revive Iran’s nuclear deal.

The European powers, all parties to the 2015 nuclear deal, have been lobbying for the International Atomic Energy Agency’s 35-nation Board of Governors to adopt a resolution at this week’s quarterly meeting expressing concern at Iran’s latest breaches of the deal and calling on it to undo them.

However, Iran has bristled at the prospect, threatening to end a recent agreement with the IAEA that limits the impact of its latest moves and enables monitoring of its facilities to continue in a black-box-type arrangement for up to three months.

Three diplomats who follow the IAEA closely said the so-called E3 had scrapped their plan for a resolution.

“Cooler heads are prevailing,” said one diplomat from a country on the board that had been skeptical about the proposed resolution. Other countries had expressed concern that a resolution would undermine attempts to rescue the deal.

Separately but almost simultaneously, the IAEA said its chief Rafael Grossi would hold a news conference at midday (1100 GMT). Two of the diplomats said Grossi had told the IAEA board he plans to hold technical discussions with Iran next month.

The Europeans’ draft resolution circulated earlier this week also expressed “deep concern” at Iran’s failure to explain uranium particles found at three old sites, including two that the IAEA first reported on last week.

One diplomat said that would be the subject of the technical discussions, and if Iran’s cooperation was insufficient the plan for a resolution could be revived at the next quarterly board meeting in June.

(Reporting by Francois Murphy; Editing by Gareth Jones)

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