Iran says it will reject any offer to resolve the dispute over its nuclear programme that forces it to halt its "peaceful activities".
Mr Ahmadinejad says the West is behaving like "colonial masters"
President Mahmoud Ahmadinejad said such an initiative by European countries would be "without any value".
Britain, France and Germany are drawing up proposals aimed at persuading Iran to give up uranium enrichment by offering it a series of incentives.
Iran has dismissed Western fears that it is trying to build nuclear weapons.
It says its nuclear programme is aimed at meeting its energy needs only, and insists on its right to enrich uranium.
The EU has not given details of the new offer to Iran being considered, but diplomats describe it as a mixture of "the carrot and the stick".
BBC world affairs correspondent Jonathan Charles says Iran will be encouraged to import the fuel it needs for its civil nuclear power stations, rather than producing its own.
In return, the EU would offer freer trade as well as political guarantees and technological incentives.
The proposals are to be considered by permanent UN Security Council members and Germany next week.
The head of the International Atomic Energy Agency, Mohamed ElBaradei, said on Saturday that he hoped the package would "enable Iran to come back to the negotiating table".
But on Sunday Mr Ahmadinejad said the Europeans "know that any proposal that requires a halt to our peaceful activities will be without any value".
He said Western powers "behave like masters who still believe they are in the colonial era".
Earlier Mr Ahmadinejad said the West should not be nervous about Iran's activities.
Iran says its nuclear programme is designed to meet its energy needs
"They are nervous because of their arrogant, selfish and exclusivist tendencies."
"All of them know 100% that the nuclear programme in Iran is totally peaceful," he added, while attending a meeting in Indonesia of Muslim-majority developing nations.
Our correspondent says it is a measure of the West's desperation that it has had to resort to a new offer of incentives.
The chances of getting tougher wording on a UN resolution to threaten Iran appear slim, he adds.
Both China and Russia, which are veto-holding members of the Security Council, do not want to support any move which might open the door to military action.
The United States, Russia, China, Britain and France plus Germany are to meet in London next Friday.