The British government said on Sunday Iran's downgrading of diplomatic ties with the country was "regrettable."

"The Iranian parliament's vote to expel our ambassador, Dominick Chilcott, is regrettable. This unwarranted move will do nothing to help the regime address its growing isolation or international concerns about its nuclear programs and human rights record," said a spokeswoman for the Foreign and Commonwealth Office (FCO).

She warned that the British government was likely to take retaliatory action. "If the Iranian government acts on this, we will respond robustly in consultation with our international partners," she said.

The Iranian Majilis, the parliament, passed a bill on Sunday to downgrade the diplomatic ties with Britain, along with a reduction of trade and economic relations.

The move needs approval by Iran's Guardian Council, which vets all legislation, before it can take effect.

The Iranian parliament was acting after the British government ordered last week that all British credit and finance institutions should immediately stop transactions with Iranian banks.

The British government's financial sanction against Iran follows a report by the International Atomic Energy Agency that expressed concern over the Islamic republic's controversial nuclear program.