China has welcomed the release of the British sailors timed with the Easter holiday, who were captured when Iran alleged they entered Iranian territorial waters, an accusation firmly denied by the British Government.

A Chinese Foreign Office statement released Saturday read "China is pleased to see the issue was settled diplomatically."

Beijing had earlier called for the matter to be settled through diplomatic channels.

The sailors arrived back in Britain on Thursday after meeting with the Iranian President on their release Wednesday. They had been held captive in Iran for two weeks for allegedly intruding on Iranian waters.

The Roman Catholic Bishop of the Forces, the Rt Rev Tom Burns said their release was a "satisfactory end" to the diplomatic crisis and commended Iran for acting on the principle of forgiveness even though its accusations over the violation of Iran's territorial waters remain hotly disputed.