Iran’s constitutional watchdog on Monday gave the final approval for the downgrading of diplomatic and trade ties with Britain in response to the UK government’s move to tighten economic sanctions against the Islamic regime over its nuclear programme.

European Union ambassadors will meet in Tehran on Monday to discuss their response, a British government spokesman said. A spokesman for David Cameron, prime minister, said the UK regretted Iran’s decision.

“We will be think about precisely how we should respond but there will be a meeting of EU heads of mission in Tehran today to discuss that. There will be further discussion on Thursday at the (EU) Foreign Affairs Council,” he said.

Iran’s Guardian council ratified a bill approved by the country’s parliament to “downgrade political relations with the UK to chargé d’affaires level within two weeks and minimise economic and trade ties in order to safeguard national interests and defend the rights of the great nation of Iran”.

The legislative body, which voted in favour of the bill by a large majority on Sunday, also warned it could “take appropriate action” against other countries which have pursued similar policies towards Iran.

Abbasali Kadkhodaei, the Guardian Council’s spokesman, told local media that the parliament’s proposal did not contradict the constitution and therefore could be enforced.

Britain on November 21 banned dealings with Iranian banks, including the central bank, in response to a report earlier this month by the International Atomic Energy Agency that said Iran had worked on designing an atomic bomb. France also said last week it had proposed a European embargo on Iran’s oil sales.

Dominick Chilcott, British ambassador to Tehran, who only took up his position at the Tehran embassy on October 26, will have two weeks to depart, leaving the mission to Jane Marriott, his deputy.

It is not clear how other European states would react to the expulsion of the UK ambassador, should it go ahead. “It is a bilateral issue between Iran and the UK, but it is also a European issue,” said one western diplomat.

The bill requires both countries to withdraw their ambassadors, but Iran currently has no official envoy in London, the post having been left vacant for a year without any explanation given.

Bilateral ties have not been smooth since the 1979 Islamic revolution when Britain severed diplomatic relations, briefly reopening its embassy in Tehran in 1988 only to shut it again a year later. Ties were restored in 1990 at chargé d’affaires level until 1998 when full diplomatic relations were resumed.

In the absence of diplomatic representation by the US and Israel, considered Iran’s arch foes, the British embassy in Tehran has been seen as the most hostile foreign mission by Iranian officials, who have accused it of attempting to interfere in Iran’s internal affairs – notably during political protests that followed the presidential elections over two years ago. Britain has denied any interference.

Iranian analysts also believe Britain has been feeding the US with intelligence.

Ali Larijani, Iran’s parliamentary speaker, warned Britain on Sunday that “this is [only] the beginning” of “monitoring UK behaviour”.

Meanwhile, a senior commander of Iran’s elite Revolutionary Guards warned on Saturday that the Islamic regime would retaliate against any attack on its nuclear sites by hitting Nato’s missile defence radar base that is being built in Turkey. Amir-Ali Hajizadeh, commander of the Guards’ aerospace division, added that Iran considered the shield a cover for US and Israeli aggression against Iran under the guise of Nato.

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