Premier Mohammed Mossadegh of Iran has revealed that his government is prepared to set aside for a specified period 25 percent of the receipts from the nationalized Abadan refineries as compensation to the former owner, the Anglo-Iranian Oil Co. His proposed solution for the oil dispute was submitted as an alternative to the so-called British final offer of Feb. 20, which Premier Mossadegh called unacceptable.

In answer to a cabled query from this correspondent, the Iranian Premier indicated that the Iranian differences with Great Britain’s latest plan have narrowed to one main point. Iran, according to Mossadegh, is prepared to take the question of compensation to the International Court of Justice if payments are assessed by that court with regard to the value of the Iranian installations and properties formerly held by the Anglo-Iranian Oil Co.

But Iran will not agree, according to the Iranian Premier, to the British aim of having compensation based additionally upon consideration of profits the Anglo-Iranian Oil Co. might have had if its contract had continued in force until the specified termination date of 1999.

An Anglo-American joint communique issued March 8 after a conference between British Foreign Minister Anthony Eden and President Eisenhower stated that the latest British plan for solving the oil dispute with Iran was the “final offer”. The communique also stated that the United States considered the British offer fair and just.

The dispute arising from the nationalization two years ago of the Anglo-Iranian properties has brought the Iranian oil industry virtually to a halt and has contributed to impoverishment of the country, as well as to considerable political instability.

In describing the counteroffer, Mossadegh said: “The Iranian government is prepared for a specified period (to be arranged by direct Anglo-Iranian negotiations, according to Iranian sources here) to set aside 25 percent of its oil receipts as compensation to the British company. This would remove the necessity of referring the case to arbitration. It is obvious that this arrangement would be to the benefit of both parties. For with the gradual increase of oil production at Abadan there would be gradual increase in the 25 percent share of receipts going to the British company.”

In explaining Iran’s objections to Britain’s “final offer,” Premier Mossadegh asserted that the full extent of Anglo-Iranian profits is unknown even to this day, since the British company refused to open its books to the Iranian government.

Compensation based on calculation of profits would mean, according to Mossadegh, that the Iranian government would have to go before a court without having any clear idea of the extent of the claims against it. Mossadegh also was fearful that compensation based on consideration of future profits extending over a period of nearly 50 years would represent sums beyond Iran’s capacity to pay.

Premier Mossadegh’s cable, said in part: “The Iranian government is prepared to follow the example of the other states who have nationalized their industries and to compensate the British company to any amount fixed by the International Court of Justice. But the British government wishes us to yield to the jurisdiction of the said court without having fixed the scope and bases of their claims. This we cannot accept.”

The most recent British offer was supplemented by an American plan for advancing to Iran $130,000,000 to be paid back in future deliveries of oil. Iranian agreement to the proposal would also clear the way for marketing Abadan oil products, ending the present British boycott of Iran.