The UK government has suspended bilateral relationships with Iran until a dispute over the seizure of British sailors from Iraqi waters is resolved.
The sailors' ship, HMS Cornwall, patrols Iraqi territorial waters
Foreign Secretary Margaret Beckett told MPs that diplomatic efforts were continuing with Iranian officials to release the 15 navy personnel.
However, other business has been suspended, with "aspects of our policy towards Iran under close review".
Iran seized the personnel five days ago, saying they were in their waters.
Earlier the Ministry of Defence had shown satellite data which it said proved the personnel were 1.7 nautical miles inside Iraqi waters when they were seized.
Vice Admiral Charles Style said the sailors had been "ambushed" after the search of a vessel and that their detention was "unjustified and wrong".
UK VERSION OF EVENTS
UK government says merchant vessel boarded by crew from HMS Cornwall was 1.7 nautical miles inside Iraqi territorial waters
HMS Cornwall was south-east of merchant ship, inside Iraqi waters
Iranian government initially told UK that merchant vessel was at a point still within Iraqi waters
After UK pointed this out, Iran provided alternative position, within Iranian waters
Mrs Beckett, making a statement to the House of Commons on Wednesday, repeated the prime minister's position that the situation had reached "a different phase".
"That is why MoD have today released details of the incident and why I have concluded that we need to focus all our bilateral efforts during this phase to resolution of this issue.
"We will, therefore be imposing a freeze on all other official bilateral business with Iran until this situation is resolved."
Iran has failed to agree to British demands, she said, although she added it had made no demands.
Britain had asked for information on the personnel, consular access to them and their release.
"No one should be in any doubt about the seriousness with which we regard these events," Mrs Beckett said.
The Iranians have said the incident is not linked to any bilateral, regional or international issue, she added.
The US, Turkey, Saudi Arabia and other British allies had given support to Britain in demanding the release of the 15.
"I am particularly grateful to my colleague, Hoshyar Zebari, the Iraqi Foreign Minister, who has confirmed publicly that the incident took place in Iraqi waters, calling for the personnel, who are acting in Iraq's interests, to be released."
Strong moral position
Speaking after the Ministry of Defence released the co-ordinates of the incident, Mrs Beckett said the information was being publicly discussed to get both the British and Iranian accounts on the public record as "behind-the-scenes diplomacy" had failed to resolve the issue.
Shadow foreign affairs secretary William Hague praised the "firm but measured" approach the government had taken.
"The seizure of our personnel was clearly unjustified and the evidence the Foreign Secretary and the MoD has presented shatters the credibility of any claim they were operating in Iranian waters."
He added: "If this did turn into a protracted dispute, this country is placed in the strongest moral and legal position in having approached the issue in this way,"