The European Union is poised to issue stronger financial sanctions against Iran, an EU spokeswoman said Monday.

Word of the agreement came after British Prime Minister Gordon Brown announced at a London news conference with U.S. President George W. Bush that Britain is freezing the assets of Iran's largest bank to discourage Tehran from developing nuclear weapons.

Brown said Britain was urging — and that Europe "will agree" — to impose further sanctions because of Iran's refusal to halt the uranium enrichment that could be used for nuclear weaponry.

The EU has not yet officially announced stronger sanctions.

But Cristina Gallach, spokeswoman for EU foreign affairs and security chief Javier Solana, said EU foreign ministers meeting Monday in Luxembourg were prepared to take formal action — and agreed in principle on the need for stronger sanctions.

"It is clear they are ready to move further. We will definitely take a formal decision," she said. Gallach would not speculate on the timing of a final decision. EU leaders meet in Brussels for an EU summit later this week.

First word of new sanctions came from Brown's London news conference. Later, Bush's national security adviser, Stephen Hadley, told reporters aboard Air Force One that an announcement was expected Monday from the Luxembourg meeting.

At their joint news conference, Bush and Brown both sent a strong message to Iran that it must end its pursuit of nuclear weapons or face a tougher international response.

"Britain will urge Europe — and Europe will agree — to take sanctions against Iran," Brown said.

"Action will start today in new phase of sanctions on oil and gas. We will take any necessary action so that Iran is aware of the choice it needs to make," he said.

Hadley and Brown's spokesman, Michael Ellam, both indicated that European nations had agreed in principle to target the Iranian bank, Bank Melli.

The United States last year accused Bank Melli of providing services to Iran's nuclear and ballistic missile programs.

"There is agreement among all EU member states to freeze assets of Bank Melli," Ellam said.

Hadley said a new round of European sanctions would be a significant hardening of resolve against Tehran.

He said European foreign ministers are examining plans for sanctions on Iran's oil and gas sectors. The measures are complex, but "would be a major step forward," Hadley told reporters aboard Air Force One.