Iran's parliament has voted to expel the British ambassador in Tehran in retaliation against economic sanctions imposed by the west over the Islamic republic's disputed nuclear programme.

Iranian MPs on Sunday passed a bill that in effect gave President Mahmoud Ahmadinejad's government two weeks to expel the ambassador, Dominick Chilcott.

The bill, which also requires Iran's economic and trade links with the UK to be reduced, has yet to be approved by the Guardian Council, the powerful body of clerics and lawyers that vets parliamentary activity.

If the bill comes into effect, diplomatic relations between Tehran and London will be downgraded from ambassadorial level to that of chargé d'affaires and Chilcott – who took up his post only a few weeks ago – will have to leave Tehran. Iran's embassy in London had been operating without an ambassador for several months.

The UK Foreign Office vowed to react "robustly" if Iran expels Chilcott.

"The Iranian parliament's vote to expel our ambassador is regrettable," a statement said. "This unwarranted move will do nothing to help the regime address their growing isolation or international concerns about their nuclear programme and human rights record. If the Iranian government acts on this, we will respond robustly in consultation with our international partners."

Last week, the chancellor, George Osborne, announced fresh punitive measures targeting Iranian financial sectors, including the Central Bank of Iran (CBI), in the wake of a report by the International Atomic Energy Agency (IAEA), which said the Islamic regime had been engaged in nuclear activities with military applications. Iran denied the claims, saying the UN report had been fabricated.

Iran's oil industry relies heavily on the CBI for most of its banking transactions. Sanctioning the CBI would have drastic consequences for the country's economy, but the largest buyers of Iran's crude oil such as China, Japan and India are unlikely to follow Britain's path.

Italy and Spain, which are the largest buyers of Iran's oil in Europe, are also believed to be opposed to targeting the CBI.

In Sunday's vote at the Iranian parliament, 179 MPs voted in favour of the motion, four opposed and 11 abstained, local agencies reported, which shows a significant number of MPs were absent from the 290-seat parliament.

The semi-official Fars news agency said the four who voted against the motion complained the bill was not tough enough and demanded a complete cut in diplomatic ties with the UK.

The parliamentary speaker, Ali Larijani, said the vote was "the beginning of the road". Mehdi Kuchakzadeh, a Tehran MP, suggested that Iranians might raid the British embassy, implying a possible recurrence of the 1979 US hostage crisis in Iran.

"The British government should know that if they insist on their evil stances the Iranian people will punch them in the mouth, exactly as happened against America's den of spies, before it was approved by officials," said Kuchakzadeh.

"Den of spies" was first used to describe the US embassy in Tehran in 1979. The US currently does not have an embassy in Iran.

"We must lock the British embassy and ignore them until they come begging like the Americans," said another MP, Mahmoud Ahmadi Bighash, in quotes carried by Borna news agency.

Despite the vote, it is too early to say that the British ambassador will be expelled. Some analysts have interpreted the vote as part of a power struggle between parliament and government and believe that Iran's foreign ministry might choose to ignore the decision of the MPs, especially because the parliamentary term will end in March.

By voting to expel Chilcott, some observers believe MPs might be trying to please the establishment in order to secure their candidacy for another term, which needs to be approved the Guardian Council.

The parliament's decision is seen by pro-Ahmadinejad supporters as an attempt to hamper the government's efforts to reduce tensions with the international community.

Iran's state-run Press TV reported that Ahmadinejad said that Iran was ready to hold talks with the five permanent members of the UN security council – Britain, France, China, Russia, the US – plus Germany, a group known as P5+1.