Video report by ITV News Correspondent Paul Davies
Tehran's threat comes as the Ministry of Defence confirmed plans to send Type 45 Destroyer HMS Duncan - one of the most advanced warships in the world - to the Gulf in the next few days.
The 500-foot warship, which has a Harpoon on board and was the star of the Channel 5 documentary 'Warship: life at sea", will be deployed in the region to relieve HMS Montrose of its duty.
HMS Montrose, a Type 23 frigate, helped the safe passage of a British mercantile ship through the Strait of Hormuz earlier this week after three Iranian ships tried to stop its passage.
In a statement, the Ministry of Defence said: “As part of our long standing presence in the Gulf, HMS Duncan is deploying to the region to ensure we maintain a continuous maritime security presence while HMS Montrose comes off task for pre-planned maintenance and crew change over.
"This will ensure that the UK alongside international partners can continue to support freedom of navigation for vessels transiting through this vital shipping lane."
Calling for the release of Grace 1, a spokesman for Iran's foreign ministry told the state news agency IRNA: "This is a dangerous game and has consequences.
"The legal pretexts for the capture are not valid... the release of the tanker is in all countries' interest."
Iranian cleric Kazem Sedighi echoed the strong rhetoric from Tehran, telling worshippers in the capital: "Iran’s strong establishment will soon slap Britain in the face for daring to seize the Iranian oil tanker."
Foreign Secretary Jeremy Hunt reiterated the UK was not looking to escalate tensions with Iran, but said the tanker seized off Gibraltar was apprehended as it was heading to Syria, which violates international sanctions.
Mr Hunt said: "This is a situation which is changing every hour. But we are reacting to what is happening in a measured and careful way and we are being clear to Iran that we are not looking to escalate this situation.
"The reason that the Grace 1 was seized is because of the destination it was heading to."
On Thursday, Gibraltar Police announced they had arrested the captain of the Iranian Grace 1 supertanker, thought to be delivering oil to Syria, which is against EU Sanctions.
Gibraltar's chief minister Fabian Picardo confirmed 2.1million barrels of light crude oil were found on the 1,085 foot vessel.
British Royal Marines stormed the tanker off the coast of Gibraltar on suspicion it was breaking EU sanctions last week.
The arrest was made after authorities seized documents and electronic devices from the vessel.
In retaliation, three Iranian ships tried to stop a British mercantile vessel passing through the Strait of Hormuz on Wednesday.
The altercation came a day after Iran spoke out against Britain due to the interception of a supertanker believed to be breaching EU sanctions by carrying a shipment of crude oil to Syria.
Defence Secretary Penny Mordaunt said the government was "concerned" by Iran's actions and urged Tehran to "de-escalate the situation".
Conservative leadership hopeful Jeremy Hunt said Iran's attempted blockade of a British mercantile ship was a "concerning development".
He added: "I'm very proud of the Royal Navy and the role they played in keeping British asset, British shipping safe.
"We are continuing to monitor the situation very, very carefully."