Oman has begun looking after Iranian affairs in Britain, a foreign ministry official said on Thursday, as part of what Tehran said was a diplomatic deal following the closure of both countries' embassies last year.

'We have been representing Iran in London on a small scale in the last one month,' an official at Oman's Ministry of Foreign Affairs told Reuters. Representation could be upgraded in the future he added, declining to elaborate.

The arrangement indicates a slight thawing in Anglo-Iranian relations, after protesters ransacked the British diplomatic mission in Tehran last November.

The attack happened after Britain imposed new sanctions on Iran as part of broader international moves to force Tehran to halt its disputed nuclear programme. The West suspects Iran is seeking to build nuclear weapons, a charge Tehran denies.

Britain shut Iran's embassy in London and expelled all its staff late last year following the attack, which British officials said could not have taken place without some degree of consent from the Iranian authorities.

Iran's Fars News Agency quoted Foreign Minister Ali Akbar Salehi as saying on Wednesday that Iran and Britain had asked Oman and Sweden to look after their interests.

'Based on the agreement, it is planned that Oman will look after Iran's interests in Britain and Sweden will look after Britain's interests in Iran,' Fars quoted Salehi as saying.

The Foreign Office in London has so far made no public comment on the moves.

British Foreign Secretary William Hague met Salehi on the sidelines of a conference in Kabul this month, the highest level diplomatic contact since the British embassy was stormed.

The Foreign Office said they discussed Iran's nuclear negotiations as well as the situation in Syria.

Western-allied Oman has maintained good relations with Iran. It mediated the release last year of two Americans jailed in Iran for two years on spying charges and facilitated the release of a third member of the group in 2010.-Reuters