Iran on Monday informed the International Atomic Energy Agency (IAEA) in an official letter that it will begin enriching higher-grade nuclear fuel from Tuesday.

"Today we handed over the letter," said Iran's envoy to the IAEA, Ali-Asghar Soltanieh. He added that Tehran will use its nuclear stockpile to enrich uranium to up to 20 percent.

The new fuel, to be produced at the Natanz enrichment plant, will supply the Tehran research reactor which produces medical isotopes.

Iran says as a signatory to the Nuclear Non-Proliferation Treaty (NPT) it is entitled to enrich uranium for civilian purposes.