A spokesman for the office of Gordon Brown, the British prime minister, said: "We are extremely grateful for the service of locally employed staff in Iraq and take their security very seriously.
"We recognise that there are concerns about the safety of former employees. Government keeps all such issues under review and we will now look again at the assistance we provide.
"This is a genuinely complex issue and we welcome further discussion, but we need to consider all the options very carefully."
The original decision not to give the Iraqi workers preferential treatment sparked outrage in British newspapers and criticism from human rights groups.
|"I think the British government should pull it finger out and really start to address ... the whole issue of the Iraqi refugee crisis in the region"|
Tom Porteous, Human Rights Watch
Tom Porteous, London director of Human Rights Watch, said: "The Iraqi case is very, very special and very particular and I think the British government should pull its finger out and really start to address, not just the issue of Iraqi interpreters, but the whole issue of the Iraqi refugee crisis in the region."
Civilians who have worked for the British military face persecution in Iraq and many of them have had their lives threatened.
Ali, a former translator with the British forces, told Al Jazeera that the British government had failed to give asylum despite constant appeals.
"I tried in Kuwait to get refugee status but I couldn't, the reason why I don't know," he said.
"If I can't get work here, I will have to go back to Iraq to get a job with the British or another company ... but my life will be very, very dangerous there."