The UK is to expel all Iranian diplomats following the storming of its embassy in Tehran, Foreign Secretary William Hague has announced.
He said he had ordered the immediate closure of the Iranian embassy in London.
Tuesday's attack by hundreds of protesters followed Britain's decision to impose further sanctions on Iran over its nuclear programme.
Iran's parliament had previously voted to reduce diplomatic ties with the UK.
Mr Hague said he was demanding the immediate closure of the Iranian embassy in London, with all its staff to leave the UK within 48 hours.
He said there had been "some degree of regime consent" in the attacks on the embassy and on another UK diplomatic compound in Tehran.
He said all UK diplomatic staff in Tehran had been evacuated and the embassy closed.
"They cannot expect to have a functioning embassy here," Mr Hague told MPs.
However, Mr Hague said the UK was not severing relations with Iran entirely.
Correspondents say the move means relations between the UK and Iran are now at the lowest level.