The European parliament has called for Iran’s Revolutionary Guards (IRGC) to be blacklisted in Europe, a move some western politicians fear could provoke Iran to walk out of talks on reviving the 2015 nuclear deal.

The parliament has only an advisory role, but EU foreign ministers are due to meet on Monday to discuss further sanctions, and the Iranian diaspora is making the proscription of the IRGC its key demand.

In its initial response, Iran has said it would declare EU armies as terrorist organisations if the IRGC were banned. The Iranian foreign minister, Hossein Amir-Abdollahian, in a call with the EU foreign affairs chief, Josep Borrell, said the IRGC was an institution that created security.

The European Commission president, Ursula von der Leyen, broke ranks this week by backing calls to label the IRGC a terrorist organisation. Some Iranian politicians have said such a move – already implemented in the US by Donald Trump – could lead to a collapse of the talks on reviving the Joint Comprehensive Plan of Action, the technical term for the 2015 deal.

Proscribing the IRGC, as opposed to applying more sanctions, would arguably make it harder for supporters of the Iranian regime to raise money or conduct propaganda activities. The European debate plays into a parallel debate in the UK, where MPs are strongly supportive of proscription as an additional measure alongside passing sanctions on the IRGC in its entirety.

The guards oversee the volunteer Basij paramilitary force, which has been deployed against protests since mid-September that were triggered by the death of Mahsa Amini, 22, after her arrest for allegedly violating Iran’s dress code for women.

Authorities say hundreds of people, including members of the Iranian security forces, have been killed and thousands arrested during more than four months of civil unrest.

Formed shortly after the 1979 Islamic revolution, the guards answer to Iran’s supreme leader, Ayatollah Ali Khamenei, and have their own ground, naval and air forces.

Many MEPs supporting an IRGC ban also support an end to the 2015 nuclear deal talks. Hannah Neumann, a German Green MEP, told parliament: “How can we speak about reviving the JCPoA if the only thing that comes out is the international recognition that the regime urgently needs? The time for an ambiguous policy is over. As long as the brutal crackdown on protests continues, we should not negotiate. As long as the IRGC terrorise their own people and the region, we should treat them as terrorists.”

The debate about proscription has been the most intense in Germany, where the Green foreign minister, Annalena Baerbock, has said she supports a ban but only if it is legal.

Norbert Röttgen, the Christian Democrat MP and foreign affairs specialist who has been leading the criticism of Baerbock, said she was hiding behind false legal arguments. He said: “The German foreign ministry is pretending that there are legal obstacles to proscribing the IRGC. The foreign minister says that investigations or convictions in the EU are needed to list the Revolutionary Guards as a terrorist group, but the European court of justice has clarified that investigations or convictions can also be from outside the EU for a group to be put on the terror list.

“All the legal requirements are fulfilled. Currently the German attorney general is prosecuting terrorist attacks linked to the IRGC on several synagogues in the state of North Rhine-Westphalia, and in the US there is a federal court decision against the IRGC for acts of terrorism.”

Röttgen said Iran’s treatment of the protest movement was “so serious, the violence is so brutal, and the potential in this revolution so overwhelming, not only for the Iranian people but for the region and for Europe, that we have to be clear about which side we unconditionally support. By not deciding in favour of the terror listing, the EU remains ambivalent about this.”

Some US officials welcome the pressure on the regime since they believe there is a power struggle in Iran, with one faction arguing that the regime’s long-term survival is threatened unless the economy improves, which requires a lifting of US sanctions that a return to the nuclear deal would allow.

Iran and western powers have been engaged in on-off talks since April 2021 to revive the nuclear deal, which gave Iran sanctions relief in exchange for curbs on its nuclear programme.

• This article was amended on 3 February 2023 to restore words missing in a quote from Hannah Neumann. Earlier wording had the MEP seeming to refer to “brutal protests”.