The government is looking at a “series of options” after Iranian forces seized a UK-flagged tanker amid reports that Jeremy Hunt will outline diplomatic and economic measures on Monday.

Defence Minister Tobias Ellwood denied that the UK had taken its “eye off the ball” after the vessel was commandeered in the Omani waters in the economically significant Strait of Hormuz as tensions in the Middle East escalate.

It came after reports ministers are considering freezing assets of the Iranian regime in response to the diplomatic incident.

Meanwhile, audio footage has since emerged between Iranian authorities and HMS Montrose moments before the Stena Impero was seized.

In the radio recording, the Iranian vessel can be heard saying: “If you obey, you will be safe. Alter your course immediately. I want to inspect the ship for security reasons.”

HMS Montrose replied: “You must not impair, impede, obstruct or hamper the passage of the Stena Impero. Please confirm that you are not intending to violate international law by attempting to board.”

Reports from Tehran state those on board the Stena Impero are safe and well.

The foreign Secretary said he will unveil the diplomatic and economic measures on Monday in response to the apprehension and detention of the Stena Imperto, according to the Sunday Telegraph.

The paper said London may also seek the reimposing of UN and EU sanctions which were lifted against Iran in 2016 in connection to a deal on the country’s nuclear programme.

Asked if sanctions were off the table during Sky’s Sophy Ridge on Sunday, Ellwood said: “Cobra (the Government’s emergency committee) was taking place yesterday so we’re looking at the operational responsibilities from that but yes, we are going to be looking at a series of options.”

Meanwhile, shadow justice secretary Richard Burgon claimed the situation in Iran could be even worse than the war in Iraq.

Burgon told the same programme: “If we end up in a conflict backed by Donald Trump then I think it would not only be comparable with Iraq, in fact it could be even worse than Iraq, and that should really scare everybody.”

He added: “We need sensible negotiations. We’ve got a really important part to play diplomatically in this. We can use our negotiating weight.

“I think that our Government has international respect and this country has international respect in a way that Donald Trump doesn’t. I think we need to use that for the purposes of conflict resolution and for the purposes of making sure this doesn’t escalate out of control.”

On Saturday, Hunt said Iran’s actions raised “very serious questions” about the security of British and international shipping in the Strait of Hormuz.

Hunt told reporters inside the foreign and commonwealth office that, having spoken to his Iranian counterpart Mohammad Javad Zarif, Tehran saw the situation as a “tit for tat” following the detention of Grace 1 in Gibraltar.

“Nothing could be further from the truth,” he said.

Hunt said MPs would be updated about what “further measures” the government will take on Monday, adding that the threat level had been raised to three.

“Our priority continues to be to find a way to de-escalate the situation.

“That’s why I reached out to the Iranian foreign minister, that’s why due process in Gibraltar continues.

“We need to see due process happening in Iran as well, we need to see the illegal seizing of a British flagged vessel reversed, we need that ship released, and we continue to be very concerned about the safety and welfare of the 23 crew members.”

The foreign office earlier summoned the Iranian charge d’affaires, Mohsen Omidzamani, following the incident.

Iran has directly linked the seizure of the vessel with Britain’s role in detaining a tanker carrying Iranian oil earlier this month.

A spokesman for Iran’s guardian council was quoted as saying “the rule of reciprocal action is well known in international law” and that Tehran made the right decision in the face of an “illegitimate economic war and seizure of oil tankers”.

The explanation, which contrasts with a suggestion on Friday night that the Stena Impero was “violating international maritime rules” and had collided with a fishing boat, came as the UK government warned British ships to stay away from the Strait of Hormuz.

HMS Montrose, which is patrolling the Persian Gulf to protect shipping, and earlier this month intercepted Iranian patrol boats surrounding another UK-flagged tanker, reportedly arrived minutes too late to prevent the latest incident.

A second oil tanker, the Liberian-flagged Mesdar, which is managed by Norbulk Shipping UK, veered off course towards the Iranian coast after it was boarded by armed guards at about 5.30pm on Friday.

Communication with the ship was later re-established and the crew were unharmed. The tanker was reportedly allowed to resume navigation.

France and Germany joined condemnation of Iran’s actions, which have triggered concerns that it will lead to further oil price hikes amid heightened tensions in the Gulf involving Iran, the US and UK.