Iran’s top legislative body announced today that British embassy staff accused of inciting post-election violence will be forced to stand trial in Tehran.

The surprise move by the Guardian Council caused relations between London and the Iranian regime to sink still further after the two countries engaged in tit-for-tat diplomatic expulsions last week. Downing Street said the Government was concerned and seeking urgent clarification.

In a co-ordinated diplomatic move, EU nations responded by simultaneously summoning Europe’s Iranian ambassadors to explain the situation.

After rejecting British and Czech moves to pull out all European ambassadors from Tehran yesterday, the EU agreed a strongly-worded joint letter expected to be published tomorrow. The letter will threaten to implement visa restrictions unless the Iranian regime modifies its stance.

President Mahmoud Ahmadinejad has repeatedly blamed foreign powers, specifically Britain, for stirring up the protests that greeted his discredited re-election on June 12.

Ayatollah Ahmad Jannati, head of the Guardian Council which ratified the presidential election on Monday, said: “In these incidents, [the British] embassy had a presence, some people were arrested. Naturally they will be put on trial, they have made confessions.”

According to the British Government, seven of nine local staff originally detained by the Iranian authorities have now been released.

A Foreign Office spokesman denied that embassy staff took any part in demonstrations and demanded more information from Tehran.

“We are very concerned by these reports and are investigating,” a spokesman said. “Allegations that our staff were involved in fomenting unrest are wholly without foundation. We will be seeking an urgent explanation from the Iranians.”

Gordon Brown’s official spokesman added: “We are concerned about these reports and we are seeking clarification on this as a matter of urgency.”

Iran accused the embassy employees of instigating the riots and demonstrations that have convulsed Tehran for three weeks. Britain has rejected the allegations as baseless and demanded the immediate release of the staff still in detention.

Tehran announced more arrests in the post-election turmoil last night, detaining seven alleged provocateurs of violence it says were linked to Iranian exiles. The latest round of arrests underlines the authorities’ drive to portray protests as the work of outsiders rather than a reflection of widespread popular dismay.

Although the EU nations rejected the British proposal to recall all envoys last night officials said today that the option was still on the table.

The incoming Swedish presidency of the EU, which took the reins on Wednesday, has sought to strike a less aggressive diplomatic note, more in tune with Berlin and a number of other EU capitals.

Confirming a split among the EU powers, Cecilia Malmstrom, the Swedish Europe Minister, told The Times: “We are listening, there are different views.”

Most countries would prefer to wait until the G8 to increase the pressure on Tehran, but today’s developments will force a re-think for some governments.

Nicolas Sarkozy, the French President, said Britain can count on total solidarity from France in its attempts to pressure Iranian authorities to release British embassy staff in Tehran.

He says France has always wanted to strengthen sanctions against the Iranian regime, “so that Iranian leaders will really understand that the path that they have chosen will be a dead end... our solidarity with our English friends is total”.

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