Scientists at some of Britain's top universities helped Iran develop drones and fighter jets in spite of sanctions against the regime.
The revelations were revealed in the UK's Jewish Chronicle newspaper, sparking outrage among lawmakers.
A government spokesperson said Britain would not "accept collaborations which compromise our national security" while David Lammy, the Shadow Foreign Secretary, said the investigation by the JC was "deeply troubling" and called for an urgent investigation into sanctions violations.
Meanwhile, Alicia Kearns MP, chair of the Commons Select Committee on Foreign Affairs said: “This is a horrifying collaboration, one that I fear risks breaching sanctions in place around sensitive and dual-use technologies.”
At least 11 British universities are involved, including Cambridge University and Imperial College London, whose staff are producing at least 16 studies that could be used by Iranian military forces.
In addition to its ban on military and "dual-use" technologies being exported to Iran, the UK has recently imposed new sanctions against Iranians supplying Russia with kamikaze drones that are being used in Ukraine.
According to the Jewish Chronicle, Tehran funded researchers in Britain working on improving drone engines in a project that boosted altitude, speed, and range.
Another British university partnered with Iranian counterparts to test sophisticated new control systems for jet engines, aimed at improving their "maneuverability and response time".
A number of MPs have requested details about how the research, including projects which could boost the technology being sold to Russia in its war in Ukraine, was conducted under the nose of the government's supposedly tough sanctions regime.