Three Iranian cargo ships seized in Singapore several months ago due to a financial dispute linked to sanctions on the Islamic Republic have been released, officials said.

"After solving the problems created by Westerners, the Iranian ships which were seized in Singapore were freed a few minutes ago," Commerce Minister Mehdi Ghazanfari told the country's semi-official Fars news agency.

Iran has been hit by international sanctions over its nuclear programme which the West fears could be used to produce atomic bombs. Iran denies this and says it needs nuclear energy.   

The website of state run Press TV reported that the dispute started when France's Credit Agricole CIB called in a loan early due to sanctions which have hit Iran's ability to access financial services in many foreign countries.

The chairman of IRISL (Islamic Republic of Iran Shipping Lines), Mohammad Hossein Dajmar, told Press TV: "They claim that since these ships did not have creditable insurance, the status of the loan was changed to an overdue debt."    

"This is while they (the West) banned British insurance (companies) from insuring Iranian ships," Dajmar said, adding that the outstanding $200 million had been repaid.   

Credit Agricole CIB told Reuters later a syndicate of banks that it represented had obtained in September 2010 the arrest in Singapore of three container vessels, the Sahand, Sabalan and Tuchal, owned by subsidiaries of Iranian shipping company IRISL.   

"In mid-November, following the failure of the borrowers to post adequate bond, the Singapore Court ordered the judicial sale of the vessels," the bank said.

"Subsequently, the borrowers fully repaid the lenders the fully accelerated loan and other amounts claimed by the lenders, in a total amount of 155 million euros ($204 million)."    

"At a hearing held on January 5, 2010, the Singapore Court decided to terminate the judicial auction sale process and ordered the release of the vessels," it said. The bank said Singapore authorities would decide the date of the release.

IRISL's Dajmar said two other Iranian vessels, seized in Hong Kong and Malta for similar reasons, were still being held, pending negotiations. He said earlier this week that those ships were being held by an unnamed German bank. - Reuters