The British government has dismissed suggestions by the Iranian leadership that UK forces were involved in twin bombings that killed five people and injured more than 100 in Iran on Saturday.
Iranian President Mahmoud Ahmadinejad last night said he suspected Britain played a role in the attacks, which tore into a shopping centre in Ahvaz, in Khuzestan province.
He was quoted as saying: "We are very suspicious about the role of British forces in perpetrating such terrorist acts."
But in a statement, the British embassy in Tehran expressed shock at the attacks, adding: "The British Government condemns all terrorist activity unequivocally.
"There has been speculation in the past about alleged British involvement in Khuzestan. We reject these allegations. Any linkage between the British government and these terrorist outrages is completely without foundation."
In June, when four similar bombings killed at least eight people in Ahvaz, a city populated mainly by Iran's minority Arabs, Tehran blamed Iranian Arab extremists, accusing them of ties to British intelligence in neighbouring southern Iraq .
Britain also denied that charge.
Iran has previously accused Britain, which has 8,500 soldiers based across the nearby Iraqi border, of encouraging the Iranian Arab separatists.
Last week Prime Minister Tony Blair said there was evidence the attacks in southern Iraq led back to Iran.