Iran will resume some controversial nuclear activities regardless of EU proposals in the next round of talks, the outgoing president says.
Khatami said decision was taken by Iran's top leadership
Mohammad Khatami said he hoped European diplomats would allow for a resumption of uranium enrichment activities, but Iran would begin again in any case.
Uranium enrichment can be used to fuel nuclear power stations, but can also provide material for nuclear weapons.
Iran insists its nuclear programme is purely for non-military aims.
EU negotiators from Britain, France and Germany are due to present their latest proposals to their Iranian counterparts by the beginning of August.
"I hope that the Europeans proposals will, as agreed, allow for the resumption of [nuclear activities]," Mr Khatami told reporters after a cabinet meeting.
"But if they do not agree, the system has already made its decision to resume [uranium conversion] at Isfahan."
Mr Khatami said the decision had been taken at an earlier meeting of top leaders of the regime.
The Isfahan plant turns uranium ore into gas as a precursor to enrichment.
Iran suspended all uranium conversion and enrichment activities in November, but has always insisted that the suspension was temporary.
The US accuses Tehran of seeking to build a nuclear arsenal and opposes its nuclear enrichment activities.
EU diplomats want Tehran to end nuclear fuel development in return for economic incentives.
Mahmoud Ahmadinejad, the conservative former Tehran mayor who was elected Iran's president last month, has said he wants to continue the nuclear programme.