Iran claims it has captured a spy working for the British Secret Intelligence Service, commonly known as MI6 (Military Intelligence, Section 6), in the South-eastern city of Kerman.
The head of Kerman's revolutionary court said the alleged spy had confessed to being in contact with four British intelligence officers 11 times, both outside as well as inside the nation, the BBC reports.
Following the admission a trial was under way, the court's head stated.
The news comes at a time when Iran and Britain have been taking steps with the aim of re-establishing diplomatic ties, after Britain had shut down its Tehran embassy in 2011, after protesters had stormed it over British nuclear sactions.
The development also comes only a day after a sensational Associated Press revelation pointed out that Robert Levinson, an American and former FBI agent who had gone missing in Iran for almost seven years, had been a CIA operative working for an unapproved mission.
Iran, in more than a few occasions, has claimed to have captured spies working for foreign economies but in many of these cases, the accused is released without prosecution after months of capture.
The Foreign Office of the United Kingdom is yet to comment on the issue.
Iran's envoy to the UK visited London for the first time earlier this week during which he met officials of the Foreign Office. UK Foreign Secretary William Hague said that the relationship between the two countries would improve on a "reciprocal basis".