The Iran nuclear deal was put on life support on Sunday after Iran took a further step to breach its rules by taking its low-enriched uranium limit over the agreed threshold.

It was the second Iranian breach of the agreement in a matter of weeks, although Iran took only a relatively modest step by increasing enrichment from the agreed 3.7% level – enough to generate to civil nuclear power – to 5%, still well below the 20% threshold that is seen as putting Iran on course to developing a nuclear bomb.

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But Tehran, in a new development, said it would keep reducing its commitments under the deal every 60 days unless European signatories to the pact protected it from US sanctions imposed by Donald Trump.

“We are fully prepared to enrich uranium at any level and with any amount. In a few hours, the technical process will come to an end and the enrichment beyond 3.67% will begin,” said Behrouz Kamalvandi, a spokesman for Iran’s Atomic Energy Organisation, referring to the limit set in the 2015 agreement.

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The three European powers that are signatories to the deal – Germany, France and the UK – all condemned the Iranian move, but it is likely that Europe will not yet put the alleged violation into the nuclear deal’s cumbersome dispute mechanism. They are likely to wait until there has been a further chance for European diplomats to meet their Iranian counterparts to reassure Tehran it wants to preserve the deal, also known as the joint comprehensive plan of action (JCPoA).

That meeting is due to happen by 15 July. The EU – whose diplomats see the deal as the premier diplomatic achievement of the 21st century – will be looking for technical confirmation about the steps Iran is taking.

Tehran has long signalled that it had lost patience with Europe’s perceived failure to find an effective way to compensate Iran for the impact of secondary US sanctions as well as Washington’s attempt to block all Iranian oil exports.

The EU was expecting the breach of the enrichment limits, but did not know its scale until this weekend and had no knowledge of the plan to ratchet up the breaches further every two months.

The French president, Emmanuel Macron, condemned the Iranian announcement, saying the decision was a “violation” of the agreement. The French government will not trigger the deal’s dispute resolution mechanism for now, instead giving itself a week to try to get all parties talking again.

A German foreign ministry spokesman said: “We had called upon Iran not to take further measures that undermine the nuclear deal. We strongly urge Iran to stop and reverse all activities inconsistent with its commitments under the JCPoA, including the production of low-enriched uranium beyond the respective JCPoA stockpile limit.”

A British Foreign Office spokesman said: “Iran has broken the terms of the JCPoA. While the UK remains fully committed to the deal, Iran must immediately stop and reverse all activities inconsistent with its obligations. We are coordinating with other JCPoA participants regarding the next steps under the terms of the deal, including a joint commission.”

The British foreign secretary, Jeremy Hunt, said: “We would still like to find a way to make this deal work … We will wait for independent verification by the relevant international body before deciding what next steps [to take]. But obviously if Iran is breaching this deal, there will be very serious consequences.”

Trump has already accused Iran of nuclear blackmail, but Tehran counterattacked by accusing the US of economic blackmail and unilaterally tearing up the terms of the original deal signed by the former US president Barack Obama. On Sunday night, asked about the issue by reporters, Trump said Iran “better be careful”.

The Iranian foreign minister, Javad Zarif, had earlier tweeted that all measures taken by Iran to scale back its commitments to the nuclear deal were reversible if the European signatories of the pact fulfilled their obligations.

Abbas Araqchi, Iran’s senior nuclear negotiator, told a news conference in Tehran that European countries had failed to uphold their commitments and that they too were responsible. “The doors of diplomacy are open, but what matters are new initiatives which are required,” he said.

European diplomats say Tehran has so far been vague about the specific new commitments sought by Iran and claim that among the remaining signatories to the deal it is primarily China that has a responsibility to continue to import Iranian oil. Some officials put Iranian oil exports down to 200,000 barrels per day, well below the level required to prevent the Iranian budget from going deep into debt.

The UK does not oppose other countries importing Iranian oil unless they are subject to separate sanctions.

But Iran would like the EU to set up a larger credit line for countries to buy Iranian oil, something Europe has so far resisted. Europe seems reluctant to put large sums into a any credit line designed to increase its trade with Iran.

The clearest condemnation of the Iranian move came, unsurprisingly, from the Israeli prime minister, Benjamin Netanyahu. He said the step was extremely dangerous and called on Europe to impose punitive sanctions, raising the prospect of fresh regional tensions. “The enrichment of uranium is made for one reason and one reason only: it’s for the creation of atomic bombs,” he said.