BRUSSELS (AP) — The European Union decided Monday to remove an Iranian opposition group from the EU's terror list and lift the restrictions on its funds, a move likely to further deteriorate ties with Tehran.

The decision by the 27-nation bloc's foreign ministers means that as of Tuesday, the assets of the People's Mujahedeen Organization of Iran, or PMOI, will be unfrozen. It is the first time an organization has been "de-listed" by the EU.

The group had been blacklisted as a terror organization by the EU since 2002, but waged a long legal battle in the EU's court of justice to reverse that decision. Several courts had ruled that the EU had failed to explain why it froze the assets of the Paris-based group.

"What we are doing today is abiding by the decision of the court, there is nothing we can do about the decision," said Javier Solana, the EU's foreign policy chief.

The court-mandated move is likely to complicate difficult ties with Tehran just as the EU is trying to negotiate over Iran's nuclear program. The EU and the United States fear Iran is building atomic weapons. FIND MORE STORIES IN: United States | Iraq | Saddam Hussein | Iran | Tehran | People | Javier Solana | Paris-based | Foreign Secretary David Miliband | Ayatollah Ruhollah Khomeini | Mujahedeen Organization of Iran | National Council of Resistance of Iran | Mujahedeen-e-Khalq

British Foreign Secretary David Miliband appealed to Iran to return to talks with European nations and the United States over its nuclear program. "During 2009 there will and should be significant focus on this issue," Miliband said.

The group has been on the U.S. State Department's terror list since the mid-1990s.

The People's Mujahedeen, also known as the Mujahedeen-e-Khalq, is the military wing of the National Council of Resistance of Iran, which is based in Paris. The council said it is dedicated to a democratic, secular government in Iran.

It was founded in Iran in the 1960s and helped followers of Ayatollah Ruhollah Khomeini overthrow U.S.-backed Shah Mohammed Reza Pahlavi in 1979.

But the Mujahedeen-e-Khalq fell out with Khomeini, and thousands of its followers were killed, imprisoned or forced into exile.

The group insists its terrorist designation is unfair, saying it renounced violence in 2001 and hasn't kept any arms since 2003.

The group had established a camp for about 3,500 members in Iraq, which its forces used to launch cross-border attacks into Iran. After U.S.-led forces overthrew Iraqi dictator Saddam Hussein in 2003, American troops removed the Iranian group's weapons and confined its fighters to the camp.