Iran has frozen bank accounts belonging to rights activist Shirin Ebadi and confiscated her Nobel Peace Prize medal in a bid to pressure the critic of the Islamic regime, colleagues said on Friday.

Ebadi, who won the prize in 2003 for her outspoken democracy and human rights campaign, was undeterred despite urging the international community to act against Iranian "abuses" while she is abroad, her fellow activists said.

- Her prize money was deposited in a bank account and it was used to help prisoners of conscience and their families - a founding member of Ebadi's human rights group, Mohammad Ali Dadkhah, told AFP.

- The account has been blocked by the officials and they do not allow withdrawals - the lawyer said.

- This is illegal, as blocking and confiscation should be the decision of a court where evidence is presented for such an act - he said. - It is politicised. -

On Thursday, Norway said Iran had confiscated Ebadi's Nobel medal and diploma from a bank box and that it had summoned Iran's envoy to Oslo in protest.

- Such an act leaves us feeling shock and disbelief - Norwegian Foreign Minister Jonas Gahr Stoere said, stressing it was the first time a medal has been confiscated in Nobel history.

But the Iranian foreign ministry denied seizing the medal although it implicitly confirmed her assets had been blocked on the grounds that no tax had been paid on them.

Ebadi left Iran shortly before the disputed June 12 presidential election won by incumbent Mahmoud Ahmadinejad, which sparked widespread protests and the regime's subsequent crackdown.

Thousands were arrested as mass protests broke out against Ahmadinejad's re-election and dozens were killed in clashes with security forces.

The authorities have also blocked the bank account of Ebadi's husband, Javad Tavassolian, said another member of Ebadi's Human Rights Defenders Centre, Mohammad Seifzadeh, adding that the group had learned about the freeze about 10 days ago.

Iran is demanding about 400,000 dollars (268,500 euros) in taxes on Ebadi's prize money, which amounted to 1.3 million dollars, her colleagues said, arguing that under Iranian law it should not be taxed.

The Iranian foreign ministry protested against Norway's accusation that it had confiscated Ebadi's medal.

- We are surprised by Norwegian officials taking a biased position with disregard to laws respected by all - spokesman Ramin Mehmamparast said in a statement carried by state news agency IRNA.

- We do not understand why Norwegian officials ... are seeking to justify people's negligence and refusal to pay tax on assets, and are casting doubt on countries' legal mechanisms.

- We protest at such attitudes - he said.

Seifzadeh saw the move as aimed at - pressuring Ebadi, so that she will be banned from leaving Iran under the pretext of tax evasion whenever she returns. -

- It appears that Ahmadinejad's government is bound to increase pressure on dissent to a point that no independent and lawful criticism on human rights can be heard - he said.

Both men, who formed the Human Rights Defenders Centre with Ebadi a decade ago, insisted that the Nobel winner will still return to Iran.

The group has faced mounting pressure since its offices were shut down in a police raid in December.

Two of its members, including Dadkhah, were jailed for several weeks after the June election and others have been banned from travelling abroad.

Ebadi, 62, vowed recently to press on with her fierce criticism of the Islamic republic despite the fact she risked her own life doing so.

- In effect they have threatened me with death - she told London's The Times in a September interview. - If nobody stands up to them they will act even worse. -