"Out of nine people, five of them have been released and the rest are being interrogated," Iranian Foreign Ministry spokesman Hassan Ghashghavi said at a news conference, state television Press TV reported.
Iran's Intelligence Minister Gholam-Hoseyn Mohseni-Ezhei on Sunday said "the British embassy played a crucial role in the recent unrest both through its local staff and via media", Iran's Irna news agency reported.
"We have photos and videos of certain local employees of the British embassy, who collected news about the protests.
"The embassy sent staff among the rioters to direct them in order to escalate the riots so that the rioters could file fabricated reports about the [rallies] to the world from various locations," the Iranian minister added.
Britain has protested strongly over the arrests, which have now been been confirmed by the BBC.
Prime Minister Gordon Brown told a news conference in London that Iran's behaviour was "unacceptable, unjustified and without foundation".
Standing alongside his Swedish counterpart and President of the EU Commission, Fredrik Reinfeldt, Mr Brown also thanked the EU for "its support and solidarity".
On Sunday, the European Union warned Iran that "harassment or intimidation" of embassy staff would be met with a "strong and collective" response.
Video appearing to show arrests following protests in Tehran on Sunday
The British foreign office has not said what the four staff still in custody do at the embassy, but the BBC understands that one of them has the job of reviewing local news sources and keeping abreast of political developments, our Middle East editor Jeremy Bowen in Tehran says.
He says that none of the nine who were detained has dual Iranian-British nationality.
Despite the releases, the fact that some employees are still being held means the issue remains a serious problem for the UK, our editor adds.
12 June Presidential election saw incumbent Mahmoud Ahmadinejad re-elected with 63% of vote
Main challenger Mir Hossein Mousavi called for result to be annulled for electoral fraud
Street protests saw at least 17 people killed and foreign media restricted
Iran has repeatedly accused foreign powers - especially Britain and the US - of meddling after the 12 June election.
The poll was won by a landslide by incumbent President Mahmoud Ahmadinejad, but his opponents said the victory was achieved by massive fraud. Some 17 people are thought to have died in subsequent street protests.
In the fallout from the crisis, Tehran has expelled two British diplomats and the UK has responded with a similar measure.
However, Mr Ghashghavi said on Monday that "there is no plan at the moment to close any embassy or downgrade ties with them".
Some 17 people are thought to have died in street protests after the disputed presidential poll, which the opposition complains was rigged.
At least 1,000 opposition supporters are reported to have staged a noisy rally outside a mosque in Tehran on Sunday evening before it was broken up by police and militia.
Riot police used tear gas and clubs to disperse the crowd outside the Ghoba Mosque, Iranian eyewitnesses said.
The report could not be independently verified because of reporting restrictions on foreign media.
Poll verdict due
In a separate development, Iran's state TV said the recount had started on Monday in the capital Tehran as well as in the provinces.
Iran's Guardian Council has offered to recount a random 10% of the votes from the election.
The process was expected to be completed later on Monday and the result would be announced shortly afterwards, al-Alam television said.
But Mr Mousavi insists the poll was rigged and therefore should be annulled.
On Sunday, Mr Mousavi met members of a committee set up by the Guardian Council to examine the disputed poll, Iran's semi-official Fars news agency reported.
It said Mr Mousavi was expected to present his proposal on the issue, without giving any further details.
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