Downing Street expressed "regret" today at Iran's decision to expel the UK's ambassador from Tehran in a further worsening of relations between the two countries.
Iran's constitutional watchdog, the Guardian Council, today ratified a parliamentary bill to cut back diplomatic relations with the UK in retaliation for its support for recently upgraded sanctions on Tehran over its nuclear programme.
Foreign Secretary William Hague will update MPs on the spat in the House of Commons this afternoon and will discuss the issue when he meets fellow European Union foreign ministers on Thursday.
EU heads of mission in Tehran are due to meet today to discuss the development.
The bill - passed by an overwhelming majority yesterday - requires both Iran and Britain to withdraw their ambassadors from the other country and reduce representation to the level of charge d'affaires.
It also calls for trade between the two countries to be reduced to "minimum levels".
President Mahmoud Ahmadinejad has five days to sign the bill before Iran's foreign ministry can act on it.
Ambassador Dominick Chilcott only took up his position at the Tehran Embassy on October 26 and could be returning home after little more than a month in post.
Prime Minister David Cameron's official spokesman told reporters at a daily media briefing today: "Clearly we regret their decision to expel our ambassador.
"That decision will do nothing to help the Iranian regime address its growing isolation from the international community.
"We will think about precisely how we should respond, but there will be a meeting of EU heads of mission in Tehran today and there will be further discussion on Thursday at the EU Foreign Affairs Council."
The Foreign Office described yesterday's overwhelming vote in the Tehran Parliament as "unwarranted" and "regrettable", adding: "If the Iranian Government acts on this, we will respond robustly in consultation with our international partners."
The latest sanctions by Britain and other countries, including the United States, followed a report by the International Atomic Energy Agency which expressed "serious concerns" regarding "possible military dimensions" to Iran's nuclear programme.