Britain, which went to war over the Falkland Islands in 1982, said it had protested to Argentina over a new law that includes the disputed islands within an Argentine province.
The British foreign office has delivered a diplomatic note to the Argentine embassy in London outlining Britain's rejection of the law, minister Chris Bryant said in a statement to parliament.
"The UK firmly rejects the enactment," Mr Bryant said.
The Argentine law passed in early December formally defines the borders of the southernmost Argentine province of Tierra del Fuego, Antarctica and the Southern Atlantic Islands, including within the region's borders the Falkland Islands, known as Las Malvinas in Spanish, and part of Antarctica.
Mr Bryant said Britain had no doubt about its sovereignty over the Falkland Islands and several other territories that the Argentine law said were part of the province - South Georgia, the South Sandwich Islands and British Antarctic Territory.
Nearly three decades after the Falkland War, tensions over the islands continue to simmer. Indications that there could be large oil reserves around the Falklands have raised the stakes in the sovereignty dispute.
Local media said the Argentine law, long demanded by provincial authorities, would mean the local government could collect royalties from oil companies with offshore operations that had previously been paid to the federal government.
The Conservatives, favourites to win a Britiish election due by June, supported the government's rejection of the Argentine law.
"They (the territories) are sovereign to the United Kingdom, and we condemn attempts by any foreign governments to assert otherwise," Conservative foreign policy spokesman David Lidington said in a statement.
Last year, Argentina and Britain both lodged claims to a large swath of South Atlantic seabed around the Falkland Islands, setting the stage for a battle for control of potentially rich oil and gas reserves.
The Guardian newspaper quoted seismic surveys last year as saying there could be about 18 billion barrels of oil in the Falklands area.
Argentina's YPF, the local unit of Spanish oil major Repsol, said last month it would explore for oil and natural gas in the Falkland Islands basin.
Britain seized back the Falklands in a 1982 war after they were occupied by Argentine forces. Some 649 Argentines and 255 British troops died. Last March, Britain dismissed a fresh Argentine demand for sovereignty talks over the islands.
Reuters