Foreign Secretary Jeremy Hunt is considering whether to grant diplomatic protection as a means of freeing jailed charity worker Nazanin Zaghari-Ratcliffe.
Mrs Zaghari-Ratcliffe was sentenced to five years in prison in 2016 after being accused of spying.
Mr Hunt, speaking to BBC Radio 4’s Today programme, said that he had been going over the case in an “enormous amount of detail” and was considering a request by Mrs Zaghari-Ratcliffe’s husband to grant her diplomatic protection.
Diplomatic protection is a mechanism under international law that a state can use to help one of its nationals whose rights have been breached in another country.
The broad legal principle is that British diplomats would no longer be representing the interests of a citizen but the interests of their state.
Mr Hunt said he had not “come to a final decision” on the issue and said there were “pros and cons”.
He added: “This is a totally appalling situation, it should never be possible that someone can be detained like this without any due reason, for three years now Nazanin has been in prison so we have to do everything we can.
“Our priority has to be to do the right thing to get Nazanin out.”
Mrs Zaghari-Ratcliffe, who works for the Thomson Reuters Foundation, is facing a further hearing over an unspecified security charge which her family believes will include an accusation of spreading propaganda against Tehran’s Islamist regime.
She has consistently denied all allegations, insisting she was on holiday to introduce her daughter to her family.