TEHRAN, Iran - President Mahmoud Ahmadinejad said Iran would free the 15 detained British sailors and marines Wednesday as an Easter holiday "gift" to the British people.

Iranian President Mahmoud Ahmadinejad gives a medal of honor in Tehran, Iran, Wednesday, April 4, 2007 to Abolqasem Amangah, an Iranian Revolutionary guards commander, who was among those who intercepted the 15 UK sailors and marines in the Gulf. In a last minute twist to a long press conference Ahmadinejad announced that the Britons would be freed. No timetable was given. [AP]

He said the captives, who were seized while on patrol in the northern Persian Gulf on March 23, would be taken to the airport at the end of the news conference that he was addressing. An Iranian official in London said they would be handed over to British diplomats in Tehran.

After the news conference, Iranian state television showed Ahmadinejad meeting with the British crew at the presidential palace, where he shook hands and chatted with them.

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The release of the crew members would end a 13-day standoff between London and Tehran that was sparked when the crew was seized as it searched for smugglers off the Iraqi coast. Britain denied Iranian claims the crew had entered Iranian waters.

Recent days saw talk of direct negotiations between Britain and Iran, and a decrease in tensions that had risen after Iran broadcast videos in which female British sailor Faye Turney and others "confessed" to violating Iranian territorial waters, and Britain expressed outrage.

"On the occasion of the birthday of the great prophet (Muhammad) ... and for the occasion of the passing of Christ, I say the Islamic Republic government and the Iranian people - with all powers and legal right to put the soldiers on trial - forgave those 15," he said, referring to the Muslim prophet's birthday on March 30 and the Easter holiday.

"This pardon is a gift to the British people," he said.

The surprise announcement came shortly after Ahmadinejad pinned a medal on the chest of the Iranian coast guard commander who intercepted the sailors and marines.

In London, the office of Prime Minister Tony Blair said it welcomed the news.

"We are now establishing exactly what this means in terms of the method and timing of their release," a Downing Street spokeswoman said.

An Iranian official in London said the crew members would be handed over to British diplomats in Tehran and that it would then be up to the Foreign Office to decide how they would return home.

"They will go through some brief formalities and then they will go to the embassy," said the diplomat, who spoke on condition of anonymity because of the sensitivity of the negotiations. "They can go on a British Airways flight to Heathrow, they can go through the UAE (United Arab Emirates), it is up to the British Embassy in Tehran in coordination with the Foreign Office here."

The announcement came after Iran's state media reported that an Iranian envoy would be allowed to meet five Iranians detained by US forces in northern Iraq. Another Iranian diplomat, separately seized two months ago by uniformed gunmen in Iraq, was released and returned Tuesday to Tehran.

Ahmadinejad said Iran will never accept trespassing in its territorial waters.

"On behalf of the great Iranian people, I want to thank the Iranian coast guard who courageously defended and captured those who violated their territorial waters," he said.

"We are sorry that British troops remain in Iraq and their sailors are being arrested in Iran," Ahmadinejad said.

Ahmadinejad asked Blair not to "punish" the crew for confessing that they had been in Iranian waters when they were seized by Iranian coast guard. Iran broadcast video of some of the crew giving confessions, angering Britain.

He also criticized Britain for deploying Turney in the Gulf, pointing out that she is a woman with a child.

"How can you justify seeing a mother away from her home, her children? Why don't they respect family values in the West?" he asked of the British government.

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