The UK government has been served with a claim for $4 billion in damages from Iran's largest private bank for alleged lost business caused by British sanctions against Iran over its nuclear energy programme, The Wall Street Journal reports.

The UK government has been served with a claim for $4 billion in damages from Iran's largest private bank for alleged lost business caused by British sanctions against Iran over its nuclear energy program, The Wall Street Journal reports.

According to a filing on Friday with London's Commercial Court, Bank Mellat's lawyers, Zaiwalla & Co, said the bank is seeking a total of $3.98 billion in reparations for lost international businesses due to sanctions.

A spokesperson for the UK Treasury said that it could not quote on current legal proceedings, according to the news service. This publication is in contact with the UK Treasury.

Last year, the UK Supreme Court overturned a ruling against Bank Mellat imposed by the UK government as it is not a state-owned institution and there was no evidence of the bank's alleged involvement in Iran's nuclear energy program.

On January 29, 2013, the European General Court in Luxembourg quashed the European Union sanctions in place since 2010 against Bank Mellat on grounds of supporting the Iranian nuclear and missile programs, stating that the basic rights of the bank had been denied and there was no evidence supporting the claim.

Western countries have taken a number of steps in recent years against Iran over its nuclear activities with sanctions that have taken a huge toll on its economy and people. Recent measures imposed by the US government and the European Union have targeted Iran's oil, banking and financial sectors, and sanctions have included the freezing of assets and the blocking of trade to prevent Iranian companies from doing business with Western banks.

The move comes at a time when tension between the West and Iran is easing, following the election of new Iranian president Hassan Rouhani last year. After being elected, Rouhani said he was looking to take a more moderate and pragmatic approach towards international relations with the rest of the world. Last autumn a landmark deal was struck with Western powers in Geneva, which saw Tehran agree to roll back its nuclear program.

Both sides began implementing the deal in January and committed to a series of steps that will see Iranian scientists halting the production of 20 per cent uranium and the EU easing restrictions on trade in petrochemicals, precious metals and on the provision of insurance for oil shipments.

Talks are set to continue this week in Vienna on a long-term deal for Tehran to curb its nuclear activities in exchange for a reduction in sanctions.