An undeclared embargo by Iran on British imports as it steps up accusations that this country is behind a series of bombings near the southern border with Iraq is unlikely to have much immediate effect on the UK motor industry, according to trade body the Society of Motor Manufacturers and Traders (SMMT).

"Business with Iran is fairly minimal but the market offers large potential for the future. Any ban is therefore more likely to impede future growth, rather than having a direct impact now," SMMT spokesman Nigel Wonnacott told just-auto.

The Daily Telegraph reported on Thursday that the moves are further evidence of a crisis in relations between Teheran and London, highlighted by the British-led effort to curb Iran's nuclear programme and British accusations that Teheran is giving Iraqi insurgents bomb-making technology that has killed several British soldiers this year.

As hardline Iranian newspapers demanded the closure of the British embassy in Teheran, the government appeared to be acting on its threats to use economic ties to favour its allies and punish its foes, the paper noted.

"Some companies have reported difficulties even though the Iranian ministry of commerce says there are no new restraints," a Foreign Office spokesman told the Daily Telegraph. "We are looking into this and we will be discussing the situation with British companies and the Iranian authorities."

In private, however, British officials are certain a ban is in force, with British goods held up at customs and the Iranian authorities declining applications for letters of credit for British imports, the paper added, noting that a similar policy has affected goods from South Korea, which is on the board of the International Atomic Energy Agency (IAEA).

Iran's presidential chief of staff, Gholamhossein Elham, reportedly declined to confirm the import bans, but the semi-official ISNA students news agency quoted him as saying: "Political relations and views definitely have an impact on economic relations."

British officials told the Telegraph that exports to Iran, worth about £1 billion a year, had recovered after similar bans in the past.

Britain once supplied components and know-how for the Iranian Paykan car, a localised version of the 1960s-designed Hillman Hunter.

France's PSA Group eventually took over the manufacturer of that car and Iran has looked to the French for more recent locally-produced car designs such as the Peugeot 206 and Renault Logan.