The European Union has said it is ready to work with the new Iranian government, if it agrees to certain terms.

An EU spokesman said Iran must be willing to progess questions of human rights, nuclear energy and other matters of concern.

The statement comes after after the ultra-conservative mayor of Tehran, Mahmoud Ahmadinejad, secured a landslide election victory to become Iran's new president.

With all votes counted, Mr Ahmadinejad received 61.69%, ahead of the more moderate ex-President Akbar Hashemi Rafsanjani who polled 35.92%.

Turnout amongst the 47 million eligible voters was just under 60%.

The US has said the election was 'flawed' and described Iran as 'out of step' with regional trends towards democracy.

The election has been seen as the most critical since the 1979 Islamic revolution, and tensions have been running high.

Rafsanjani has claimed that Ahmadinejad's shock first-round win earlier this month came thanks to orchestrated fraud carried by well-financed hardline regime elements.

Ahmadinejad's victory, although overshadowed by the fraud allegations, leaves anti-Western ultra-conservatives in complete control of every elected and unelected institution in Iran.

The Tehran mayor will become the first non-cleric to hold Iran's presidency since 1981, a fact of little meaning to those who fear he will take away the greater social liberty of the past eight years.

Amid apparent fears over the reaction to the result, Supreme Leader Ayatollah Ali Khamenei issued a decree banning the supporters of either candidate from taking to the streets to celebrate.