Blair says Iran has a large part of the world's energy resources

He also accused Iran of "meddling in Iraq" and supporting terrorism around the Middle East.

He made his comments during a question and answer session with the chairmen of Commons select committees.

But the prime minister insisted: "No-one is talking military action or any of the rest of it."

Three issues of concern

Mr Blair told MPs: "If Iran was to develop nuclear weapons capability it would pose a very serious threat to world stability and peace - I don't think there is any doubt about that at all.

"And that is why the remarks of the president of Iran about Israel recently - they don't exactly auger well for the type of policy that they will pursue."

There is their support of terrorism around the Middle East and there is their meddling in Iraq Tony Blair

Iran's president, Mahmoud Ahmadinejad, drew widespread condemnation after he called for Israel to be wiped off the map.

Mr Blair said there were three issues about Iran that worried people.

"There's their nuclear weapons capability and refusal to co-operate with the Atomic Energy Authority," he said.

"There is their support of terrorism around the Middle East and there is their meddling in Iraq.

"On each of those three issues we have real genuine cause for concern."

Energy resources

But Mr Blair said there was no talk of taking military action against Iran, insisting it was "quite a different country from Iraq in many, many ways".

"It may well be the change in Iran comes from within ultimately," he said.