Iran has broken the terms of the nuclear deal for the first time since it was signed in 2015 in a move that will put pressure on Europe to do more to help mitigate the effect of crippling US sanctions.

The breaching of the limits on uranium stockpiles, which Iran had warned of in advance, follows the US withdrawal from the deal last year and frustration in Tehran that EU states have been unable to do more to counterbalance the results of US sanctions.

European leaders had urged Iran not to breach the terms of the deal. They will watch to see whether Tehran commits further breaches on 7 July, as it has threatened.

Tehran revealed through the semi-official Fars press agency that it was breaching the deal by allowing its stockpile of low-enriched uranium to exceed 300kg (660lbs). Iran once had 10,000kg of higher-enriched uranium.

Behrouz Kamalvandi, a spokesman for the Atomic Energy Organization of Iran, announced 10 days ago that Tehran intended to exceed the stockpile limit. But at a meeting in Vienna on Friday between Iran and the other signatories to the 2015 deal, known as the joint comprehensive plan of action (JCPoA), the EU made new offers to persuade Tehran not to go ahead with its threat.

At the meeting, the EU announced that a long-planned trading mechanism with Iran, Instex, had finally been established and the first transactions completed.

Iranian and the EU representatives are likely to meet again before 7 July in what will probably be decisive talks in a period of diplomatic brinkmanship. Iran has threatened to increase the level at which it enriches uranium above the 3.7% limit in the deal, which is enough to fuel a commercial nuclear power plant.

Uranium needs to be enriched to about 90% to become weapons grade. However, once a country enriches uranium to about 20%, scientists say, the time needed to reach 90% is halved. Iran has previously enriched to 20%.

The UK foreign secretary, Jeremy Hunt, said he was deeply worried by Iran’s announcement that it had broken its nuclear deal obligations, but he did not put forward any unilateral steps in response.

“The UK remains committed to making the deal work and using all diplomatic tools to de-escalate regional tensions,” he said. “I urge Iran to avoid any further steps away from JCPoA and come back into compliance.”

The UK, France and Germany are expected to issue a formal response. The three have the option of referring Iran’s decision to an appeals body set up by the signatories to the deal, which could take up to two months to examine the dispute before Europe could reimpose sanctions that were lifted in 2015.

But the Iran deal is not an international treaty with the force of law, so either side could take unilateral steps without direct legal consequence.

Tehran is convinced that with political will, Europe could do more to increase trade with Iran, which has collapsed over the past year. The wave of US secondary sanctions has deterred almost all large European businesses, including banks, from trading with Iran.

On Friday Tehran said some of the steps announced by France, Germany and the UK were positive but not sufficient to deter it from breaking the deal. Before the Vienna meeting, seven other European states said they would join Instex.

Tehran has been pressing Europe to also use the trading mechanism to establish credit lines so that Iranian oil exports to Europe can be financed through it. Instex is confined to easing trade in humanitarian goods not subject to US sanctions, such as food and medicine.

China has given an undertaking that it will continue to buy oil from Tehran. Iranian oil exports have fallen to about 400,000 barrels a day, harming public finances.

The Iranian foreign minister, Javad Zarif vowed Iran would never give in to US pressure. “If they want to talk to Iran, they should show respect. Never threaten an Iranian … Iran has always resisted pressure and has responded with respect when respected,” he said in a speech broadcast live on TV.

Zarif said Instex could counter what he regarded as the weaponisation of the dollar in an attempt to impose US foreign policy on Europe.

He said Instex did not meet Iran’s demands or Europe’s obligations, but still had a “strategic value” in showing Washington’s closest allies were “distancing themselves from America in their economic relations”.

He added: “This will certainly have long-term effects.” Zarif claimed Russia and China had recently decided to stop trading with dollars as part of a global trend away from using the currency.