EU expressed outrage last week, summoning Iran's ambassadors after a senior Iranian cleric suggested that local British embassy staff would face trial over their alleged involvement in protests over the disputed re-election of Mahmoud Ahmadinejad, the president.
At least nine Iranians working for the British embassy in Tehran were arrested in the wake of the June 12 poll.
All but one have now been released.
Ayatollah Ali Khamenei, Iran's supreme leader, on Monday repeated his warning to Western nations that meddling in his country's affairs would have a "negative impact" on relations.
"Some leaders of Western countries at the level of president, prime minister and foreign minister openly intervened in Iran's internal affairs that had nothing to do with them," state television quoted him as saying.
"Then, they said they don't intervene in Iran's internal affairs."
Gordon Brown, the British prime minister, denied that London had any role in the post-election violence.
"We both agree that the outcome of Iran's election is a matter for the Iranian people," he said at the news conference with Sarkozy.
"We seek no role in this at all, but the totally unjustified expulsion of foreign diplomats and continued detention of embassy staff, is unacceptable and unjustified.
"The Iranian regime must be clear, that if this action continues and we are forced to act, we will act together with our European partners."
The authorities have said 17 protesters and eight members of Basiji pro-government militia were killed in the two weeks of unrest following the vote.