Authorities have detained eight employees of the British embassy in Tehran on Saturday, alleging that they had played a 'significant role' in post-election unrest.
Foreign Secretary David Miliband, who is in Corfu for a foreign ministers' meeting, hit back by lodging a protest with the Iranian authorities, describing the detentions as 'harassment and intimidation of a kind that is quite unacceptable.'
Mr Miliband claimed that some of the detained have now been released.
On Friday, senior Iranian cleric Ahmed Khatami lashed out at Britain in a national televised sermon, saying: 'In this unrest, Britons have behaved very mischievously and it is fair to add the slogan of 'down with England' to the slogan of 'down with US'.'
And, on Wednesday, Iranian authorities announced that they had arrested several foreign nationals, some with British passports, for allegedly helping to stir up violence following President Mahmoud Ahmadinejad's re-election.
Mr Miliband insisted today that 'the idea that the British embassy is somehow behind the demonstrations and protests that have been taking place in Tehran is wholly without foundation