Britain and Iran have taken a significant step toward reopening their respective embassies in Tehran and London by appointing chargés d'affaires and holding talks about staffing on the eve of new negotiations over Iran's nuclear programme.

William Hague, the UK foreign secretary, revealed to MPs that on Tuesday that talks with the Iranian government had taken place last week in a much more positive atmosphere following intensifying diplomatic contacts in the wake of the election of the moderate President Hassan Rouhani last June.

Progress would have to take place on a "step-by-step reciprocal basis", Hague said, but he made clear he hoped the moves would pave the way to reopen the British embassy. "We are open to more direct contact," he said, adding that the coming months "may be unusually significant" in British-Iranian relations.

A non-resident diplomat is to be appointed by both countries and talks have already been held about the key issues of numbers and conditions for local staff – often harassed in the past by the Iranian authorities. Inspection of premises was another matter being addressed.

"It is clear that the new president and ministers in Iran are presenting themselves and their country in a much more positive way than in the recent past," the foreign secretary said. "There is no doubt that the tone of the meetings with them is different. We must test the Iranian government's sincerity to the full, and it is important that our channels of communication are open for that."

Britain, which was closely involved in the overthrow of the Iranian prime minister in 1953, is often more vilified in Iran than the US. Britain shut Iran's embassy in London in November 2011 and expelled all its staff after its counterpart in Tehran was stormed in a way the UK insisted could not have taken place without the consent of the Iranian authorities.

A crowd ransacked offices and burned British flags in a protest over sanctions by Britain. The mission was closed and all UK staff were evacuated following the attack, the most violent of a series of incidents that marked a deterioration in relations due to Iran's wider dispute with the west over its nuclear programme.

The Foreign Office said in a statement: "The UK will not have a diplomatic presence in Tehran until we are confident our staff will be safe and able to carry out the full range of functions."

Hague warned that the "much more positive" tone from Tehran would need to be matched by "concrete action and a viable approach" when the long-stalled nuclear talks resume in Geneva next week. He hinted that the "step-by-step" approach would also help Iranian moderates win arguments with hardliners in the Islamic Republic.

He noted that Iran was still in breach of six UN resolutions over its nuclear programme, which Tehran denies is intended to develop nuclear weapons. He said: "In the absence of change to these policies we will continue to maintain strong sanctions. A substantial change in British or western policies requires a substantive change in that programme."

Rouhani's emollient message to the west, and especially a phone call with Barack Obama, was attacked by hardliners when he returned home after the UN general assembly in New York. Iran's foreign minister, Javad Zarif, who is now in charge of the hyper-sensitive nuclear file, met his British counterpart twice in the margins of the UN meeting. The two men spoke again on Monday.

Israel, which has its own undeclared nuclear weapons arsenal, has publicly opposed any western rapprochement with Iran and described Rouhani as a "wolf in sheep's clothing."

Reporting on wider Middle Eastern issues, Hague also surveyed hopes for progress on holding a new Geneva peace conference on Syria, which is scheduled for mid-November. But he said it was not clear whether Iran, a key supporter of Bashar al-Assad, would be invited to take part. "Iran will need to change its actual policies on the ground, which include supporting a regime which is murdering its people in huge numbers," Hague said. Invitations are expected to be issued by the UN secretary-general.

The situation in Syria was "catastrophic," Hague said, but he echoed positive reports about the early progress made to destroy the Syrian government's chemical weapons arsenal.