must "immediately stop and reverse all activities" which have put it
in breach of its nuclear deal, the UK has demanded.
The Foreign Office said Tehran's announcement that it will start uranium enrichment above a limit of 3.67% put it in breach of the Joint Comprehensive Plan of Action (JCPOA).
"While the UK remains fully committed to the deal, Iran must immediately stop and reverse all activities inconsistent with its obligations," a spokesman said.
"We are coordinating with other JCPOA participants regarding the next steps under the terms of the deal, including a joint commission."
Iran said it will enrich uranium to the level needed to produce fuel for a nuclear power plant, which officials said was 5%.
Senior Iranian officials also said Tehran would keep reducing its commitments every 60 days unless signatories of the pact worked to stop US sanctions.
If uranium is enriched to 90% it becomes nuclear bomb-grade material.
America has already pulled out of the historic agreement and Tehran's announcement is a fresh setback for the remaining signatories, including the UK, which is urging Iran to remain committed to the deal.
The Middle East country says its nuclear program is for purely peaceful purposes, but there are concerns that increasing its capacity could lead to the production of nuclear weapons.
Iran's decision came less than a week after it admitted it had amassed more low-enriched uranium than the 300kg (661 lbs) allowed under the pact, prompting President Donald Trump to warn it was "playing with fire".
Trump quit the agreement last May and reimposed sanctions on the gulf nation as Washington tried to force Tehran to renegotiate the accord.
Experts say higher enrichment and a growing stockpile could narrow the one-year window Iran would need to have enough material for an atomic bomb – something Iran denies it wants but which the deal prevented.
Iran is seeking a lifting of US sanctions, which has badly hit their oil exports, as a precondition for beginning talks with the six signatories – the UK, Russia, France, China, Germany and the EU.