Hopes have been raised that Nazanin Zaghari-Ratcliffe’s ordeal is reaching the “endgame” as the British-Iranian woman was released from house arrest after serving a five-year sentence in Iran.

A former top civil servant at the Foreign Office welcomed “good” progress in her case, as her husband, Richard Ratcliffe, said he hopes it may be reaching the final stages but cautioned “we might have many more months to go”.

The 42-year-old mother, who was detained in 2016 as Tehran made widely refuted spying allegations, finished the latter part of her sentence under house arrest due to Covid-19 and had her ankle tag removed on Sunday.

But her future remains uncertain as she must appear before an Iranian court in a week’s time to face new charges.

Former Foreign Office permanent secretary Lord McDonald told BBC Radio 4’s Today programme: “We’re in the endgame, the Iranian system is behaving in a typical way.

“Nazanin has completed her sentence, something good yesterday happened with the removal of the ankle tag but the final moves have still to take place – this case has not yet ended.”

Mr Ratcliffe, who was preparing to protest outside Iran’s London embassy with their six-year-old daughter on Monday, expressed cautious optimism over the prospects of his wife’s return to the UK after speaking last week with Dominic Raab.

“I spoke last week to the Foreign Secretary who said, listen, I can’t promise you it’s going to be this weekend but it feels like we’re close,” said Mr Ratcliffe, who has long campaigned for her freedom.

“I’ve spoken to other former hostages and they say yes at the end it gets quite bumpy and this, to them, feels like the endgame. So fingers crossed it is but also we might have many more months to go.”

Many have linked a long-standing debt running into hundreds of millions of pounds as central to the case, which has been dubbed “hostage diplomacy” by former foreign secretary Jeremy Hunt.

The UK is thought to owe Iran as much as £400 million over the non-delivery of tanks in 1979, with the shipment stopped because of the Islamic revolution.

Lord McDonald insisted it was a “separate case” but said work is under way to pay back what he said is accepted is owed to Tehran.

“We acknowledge it is Iranian money and does have to go back to Tehran, problems in that case cannot complicate Nazanin’s release from Iran,” he said.

“A huge amount of imagination has gone into that. One of the key complications is that Iran is subject to very comprehensive sanctions so how this money is repaid is a part of the story. But we are dealing with that.”

Mrs Zaghari-Ratcliffe, a charity worker who was employed by the Thomson Reuters Foundation, has strongly denied the widely refuted allegations that she was plotting to overthrow the Islamic Republic’s government.

The mother, of north London, was arrested at Tehran’s Imam Khomeini Airport while taking their daughter Gabriella to see her parents in April 2016.

The fresh charges she is expected to face were unclear, but the Guardian reported that they include alleged involvement in propaganda activity against Iran, including attending a 2009 demonstration outside its embassy in London, and speaking to BBC Persian.

Mr Ratcliffe, Gabriella and his wife’s brother Mohamed will demonstrate outside the Iranian embassy in Knightsbridge from around midday on Monday.

They will deliver a 60,000-signature Amnesty International petition to the embassy calling for his wife’s immediate release.

Prime Minister Boris Johnson has urged Iran to release her “permanently”, adding her “continued confinement remains totally unacceptable”.

The UK has been locked in a high-profile diplomatic tussle over her detention, during which she suffered time in solitary confinement and took part in hunger strikes.

The Government has afforded her diplomatic protection, arguing she is innocent and that her treatment by Iran failed to meet obligations under international law.