Nazanin Zaghari-Ratcliffe remains in limbo after the UK slapped down Iran's claims about her imminent release.
Hopes were raised for the British-Iranian mum yesterday when Iranian state TV claimed she would be freed after the UK agreed to pay a £400 million "military debt" dating to the 1970s.
But UK ministers later made clear talks over the £400m are "unresolved" - and even if they had been concluded, they shouldn't be linked to the aid worker's jail term.
Foreign Office minister James Cleverly today accused the Iranian government of "playing games with Nazanin's emotions".
He told ITV's Good Morning Britain: "The sad truth is that the regime in Tehran have played games with Nazanin’s emotions and have been completely inhumane in her treatment for a very very long time. And sadly I think this is another example of this."
Speaking to Times Radio, he added: "The point we’ve always made is the British dual nationals - and Nazanin is not the only one - held in arbitrary detention by Iran should be released.
"The charges against them are illegitimate, they’re unfounded. Their incarceration is completely unacceptable and completely inappropriate.
"That is a completely separate issue to the legal dispute which is still ongoing with Iran, this multi-decades-long legal dispute.
"And Iran should absolutely not be linking the two. So we’re saying the British dual nationals should be released, that is that. And we are working through this historic legal dispute with Iran.
"They are separate issues and Iran should not be trying to link the two."
Aid worker Nazanin was sentenced to a fresh jail term of one year on Monday and handed a year-long travel ban on a new charge of "spreading propaganda against the regime".
She has already served a five-year prison sentence after being detained on charges relating to national security in 2016.
The mother-of-one was arrested at Tehran airport as she made her way back to the UK after a visit to her parents to introduce them to her daughter.
She and her family believe she is being held as political leverage to try to force the UK's hand in a long-running financial dispute between the UK and Iran.
It dates back to the 1970s when the then-shah of Iran paid the UK £400 million for 1,500 Chieftain tanks.
When the shah was toppled in 1979, Britain refused to deliver the tanks to the new Islamic Republic but kept the cash, despite British courts accepting it should be repaid.
Hopes were raised yesterday when an anonymous official on Iranian state TV said: "The release of Nazanin Zaghari-Ratcliffe in exchange for the UK's payment of its 400 million pound-debt to Iran has also been finalised."
At the same time, it was reported that Tehran and Washington had agreed on deal to swap prisoners and to release Iranian funds held in the United States.
But US State Department spokesman Ned Price also slapped down those reports, telling Reuters: "Reports that a prisoner swap deal has been reached are not true."
Nazanin's husband Richard, who has campaigned for his wife's release since 2016, said yesterday: "We haven’t heard anything.
"It’s probably a good sign that it’s being signalled, just as last week’s sentence was a bad sign. But it feels part of the negotiations rather than the end of them."
But speaking to the Mirror, he added "my instinct is that it is premature or not true."
Earlier Dominic Raab said the treatment of Mrs Zaghari-Ratciffe by Iran amounts to "torture" and accepted she is effectively being held hostage by the Middle Eastern state.
In the UK's strongest language to date, the Foreign Secretary told the BBC: "Nazanin is held unlawfully, in my view, as a matter of international law. I think she's being treated in the most abusive, tortuous way. I think it amounts to torture, the way she's being treated."
