By John Irish, Arshad Mohammed and Parisa Hafezi

PARIS/WASHINGTON/DUBAI (Reuters) -European diplomats have told Iran they plan to retain European Union ballistic missile sanctions set to expire in October under the defunct 2015 Iran nuclear deal, four sources said, a step that could provoke Iranian retaliation.

The sources cited three reasons for keeping the sanctions: Russia's use of Iranian drones against Ukraine; the possibility Iran might transfer ballistic missiles to Russia; and depriving Iran of the nuclear deal's benefits given Tehran has violated the accord, albeit only after the United States did so first.

Keeping the EU sanctions would reflect Western efforts to prevent Iran from developing nuclear weapons and the means to deliver them despite the collapse of the 2015 deal, which then-U.S. President Donald Trump abandoned in 2018.

The crux of that pact, which Iran made with Britain, China, France, Germany, Russia and the United States, limited Tehran's nuclear program to make it harder for it to get fissile material for a bomb in return for relief from economic sanctions.

As a result of Trump's withdrawal from the deal and U.S. President Joe Biden's failure to revive it, Iran could make the fissile material for one bomb in 12 days or so, according to U.S. estimates, down from a year when the accord was in force.

With that deal effectively dead, Iran's relations with the West have deteriorated over the last year, leading Washington and its allies to look for ways to de-escalate tensions and, if that happened, for a way to revive some kind of nuclear limits.

Iran denies seeking nuclear weapons, which the West sees as a threat to Israel and Gulf Arab oil exporters.

POSSIBLE IRANIAN RETALIATION

"The Iranians have been told quite clearly (of plans to keep the sanctions) and now the question is what, if any, retaliatory steps the Iranians might take and (how) to anticipate that," said a Western diplomat on condition of anonymity.

The EU sanctions are set to expire on Oct. 18 under a U.N. resolution that enshrined the 2015 nuclear deal.

They "called upon" Iran not to do anything to develop ballistic missiles that could carry nuclear weapons, a phrase urging Iran not to do so but short of a mandatory prohibition.

They also barred anyone from buying, selling or transferring drones and their components capable of flying more than 300 km (186 miles) to or from Iran without prior authorization from the U.N. Security Council, permission that has not been granted.

Since 2017, Iran has carried out a series of ballistic missile tests and satellite launches despite the resolution and, in May, it launched a missile with a potential 2,000-km range.

European powers are alarmed by the growing defense relationship between Tehran and Moscow, which Western officials say has seen Russia use Iranian drones to strike Ukraine, and the possibility Iran could supply ballistic missiles to Russia.

It was not clear whether the E3, a group comprised of Britain, France and Germany, told Iran of their intent to retain the EU sanctions when their senior officials met Iran's chief nuclear negotiator Ali Bagheri Kani on June 12 in Abu Dhabi.

EU diplomat Enrique Mora, who co-ordinates talks on the 2015 deal, raised the issue of keeping the EU sanctions when he met Bagheri Kani in Doha on June 21, but the Iranian official refused to discuss the matter, an Iranian official told Reuters on condition of anonymity.

A second Iranian official brushed off the possibility of the sanctions remaining, saying Tehran had advanced its nuclear and missile programs for years despite Western sanctions.

"Maintaining sanctions, in any capacity and form, will not hinder Iran's ongoing advancements," said this Iranian official, also on condition of anonymity. "It serves as a reminder that the West cannot be relied upon and trusted."

NUCLEAR DEAL 'NO LONGER EXISTS'

Britain's foreign ministry did not comment on whether the E3 planned to keep the sanctions or had told Iran of any decision.

However, a British foreign ministry spokesperson said the June 12 talks in Abu Dhabi "covered the range of our concerns about Iran's behaviour, including its continued nuclear escalation."

France and Germany's foreign ministries have made similar comments about those talks.

A European diplomat said Mora had started laying the legal groundwork to retain the sanctions, which would have to be approved by all 27 EU members. Two sources said the issue had not yet been discussed among all EU states.

"The lifting of sanctions was based on the principle that 2231 would be respected," this diplomat said, referring to the U.N. Security Council resolution that enshrined the 2015 deal. "That has not been the case, so there is a discussion with the Iranians to make clear that we won't lift these sanctions."

EU Spokesperson Nabila Massrali said the JCPOA sets out in some detail the commitments of different participants on the so-called Transition Day which was still several months away (Oct. 18).

"We will provide further information on EU related aspects in due course," she said in response to detailed questions by Reuters.

Under the 2015 nuclear agreement, any party could trigger the "snapback" or return of all sanctions that it removed. Most U.S. sanctions were restored after Trump left the deal.

However, three sources said the E3 did not wish to do this chiefly because it would undercut a threat conveyed in a letter from their foreign ministers to Iran last year that they would trigger "snapback" if Iran enriched uranium to weapons-grade.

Iran has enriched uranium to 60% purity and the U.N. nuclear watchdog has found traces enriched to 83.7%, short of the 90% seen as weapons grade. The 2015 deal capped enrichment at 3.67%.

Henry Rome, an analyst with the Washington Institute for Near East Policy, said an EU decision to retain the sanctions would be the first significant instance of the E3 not abiding by the terms of the nuclear deal.

"It doesn't replace the U.N. provisions but it would ensure, at least within the powers of European governments, that they are not condoning this type of Iranian behavior," Rome said. "And it does reflect that the Security Council resolution is enshrining a deal that no longer exists in any realistic form."

(Reporting by John Irish in Paris, Arshad Mohammed in Washington and Parisa Hafezi in Dubai; Additional reporting by Andrew Gray and Sabine Siebold in Brussels; Writing by Arshad Mohammed and John Irish; Editing by Daniel Wallis)