The UK government has demanded Iran "immediately stop and reverse" actions which breached the terms of its nuclear deal.
Tehran previously announced it will raise its enrichment of uranium, breaking another limit of its 2015 agreement with world powers.
The country will go beyond the limit of 3.67 per cent enrichment and its government spokesman Ali Rabiei told a news conference the new percentage "will be based on our needs”.
The decision was made a year after US President Donald Trump unilaterally withdrew the US from the deal, putting its future in doubt.
The UK, France, German, Russia and China remain signed up to the Joint Comprehensive Plan of Action (JCPOA) deal with Iran.
It is aimed at preventing Tehran acquiring nuclear weapons.
A Foreign Office spokesman said: "Iran has broken the terms of the JCPOA, following its announcement that it will start uranium enrichment above the 3.67 per cent limit agreed in the nuclear deal.
"While the UK remains fully committed to the deal, Iran must immediately stop and reverse all activities inconsistent with its obligations.
"We are co-ordinating with other JCPOA participants regarding the next steps under the terms of the deal, including a joint commission."
Tehran's decision came less than a week after it acknowledged it had broken the deal's 300 kilogram limit on its low-enriched uranium stockpile.
The JCPOA's difficulties come against a backdrop of increase tensions in the Gulf, after an attack on two oil tankers, which the UK and US have blamed on Iran, and the downing of a US drone.
The country has repeatedly warned Europe at it would begin walking away from an accord following an American campaign of sanctions that blocked Tehran's oil sales abroad and targeted its top officials.
Experts warn higher enrichment and a growing stockpile narrow the one-year window Iran would need to have enough material for an atomic bomb.
This is something Iran denies it wants but the deal prevented.
Additional reporting by agencies.
