Iranian security officials say they have arrested an MI6 spy in southeastern Iran's Kerman province, the semi-official ISNA news agency reported Saturday.
"The spy was arrested after several months of complex intelligence activities," ISNA quoted the head of Kerman's revolutionary court, Dadkhoda Salari, as saying.
The accused spy visited with British intelligence officers 11 times both in and outside Iran and has confessed to his crimes, Salari reportedly told ISNA. The MI6 is Britain's foreign intelligence agency.
The UK Foreign Office told CNN it did not comment on intelligence matters.
Relations between Britain and Iran have warmed somewhat in recent months. An Iranian envoy this week made the first visit to the United Kingdom since all Iranian diplomats were expelled in 2011, following an attack by protesters on the UK Embassy in Tehran.
UK Foreign Secretary William Hague said this week that relations were improving "on a step-by-step, reciprocal basis."
The reported arrest of an MI6 spy also comes in the same week as reports have emerged in the United States that former FBI agent Bob Levinson, who went missing on a trip to Iran in 2007, was working there for the CIA, the U.S. intelligence service.
The State Department and Levinson's family have denied he was working for the U.S. government ever since he disappeared.
The Associated Press and The Washington Post first reported the CIA angle on Thursday. Officials have maintained that Levinson was conducting private business in Iran.
At the same time, a bipartisan group of senators in Washington has been discussing possible legislation that would impose tougher sanctions on Iran. However, it is not clear whether the Democratic majority would bring such a deal up for a vote.