Iran is to free the detained eight British Marines soon, the official IRNA news agency reported on Wednesday.

"The investigation determined that they had entered the Iranian territorial waters by mistake and they had no aggressive intentions, so they are to be freed soon," IRNA quoted an official source as saying.

It is reported that the phone consultation between Iranian Foreign Minister Kamal Kharrazi and British Foreign Secretary Jack Straw on Tuesday played an important role in the positive development of the incident.

Iran on Monday seized three British naval boats and eight Marines aboard in the Shatt al-Arab waterway, saying they had entered Iranian territorial waters without permission.

Earlier on Tuesday, Iran's state news channel reported that the Islamic Republic was to prosecute the detained British soldiers.

The incident came shortly after Britain, along with France and Germany, accused Iran of being less than fully cooperative with the International Atomic Energy Agency on the inspection of its nuclear program.