It was the first meeting between a representative of the British government and a Hamas member of the new Palestinian unity government.
"This is just to discuss the kidnapping. It doesn't represent a change of policy," a British diplomat said before the meeting.
The European Union considers Hamas to be a 'terrorist' organisation.
Johnston was seized while driving his car in Gaza. There has been no public word on his fate despite Palestinian government pledges to find him.
Ghazi Hamad, a Palestinian government spokesman, said: "I think we are on the way to resolve it [Johnston's release]. But we need more time, to bring him alive and not harmed, without using force, but we are discussing all choices."
He said Haniya told the British envoy that he hoped the meeting would lead to a dialogue with Britain on political and economic issues
Israel has called on Western powers to maintain an international boycott of the Hamas-led unity government, which has rejected their demands to recognise Israel, renounce violence and accept existing interim peace deals.
A senior Israeli official told Reuters news agency that the meeting harmed efforts to isolate Hamas and could send a message to the group it could gain ground diplomatically if foreigners were abducted.
"This undermines our policy and opens the door to further abductions," the official, who declined to be identified, said.
The US has said it would hold unofficial contacts with non-Hamas ministers and Britain and some other European countries have taken a similar line.
Western diplomats have said there is a general understanding since Hamas came to power in March 2006 that their no-contact policies could be relaxed in extreme cases such as kidnappings.