BRITAIN: Britain's relations with Iran deteriorated further yesterday when the Iranian ambassador's diplomatic status was downgraded following a row over the appointment of his British counterpart in Tehran.
Although Downing Street denied that the downgrading of Mr Morteza Sarmadi to chargé d'affaires was diplomatic tit-for-tat, the move came shortly after Iran rejected Britain's new ambassador in Tehran - amid Iranian newspaper allegations that he was a "Jew who is an MI6 agent".
The British embassy in Tehran is now being operated by the chargé d'affaires but Britain says there are no plans to replace the original appointment, Mr David Reddaway. The Foreign Office has denied that Mr Reddaway, who is not Jewish, is an intelligence operative using diplomatic cover. He is married to an Iranian and was first posted to Tehran in 1977.
The row over the appointment is a setback to British-Iranian relations which were slowly being rebuilt under Labour. Relations had improved slightly following the Iranian government decision in 1998 not to pursue the fatwa against the British author, Salman Rushdie.
Downing Street said yesterday that it would continue to "engage" with Tehran and encourage the reformers, led by President Khatami. Britain broadly supports the recent Bush description of Iran as part of an "axis of evil" sponsoring terrorism at home and abroad.