British authorities on Friday revoked the licence of Press TV, the Iranian state broadcaster's English-language outlet, saying the channel had breached a string of regulations.
The network hit back on its website, calling the decision "a clear act of censorship".
Ofcom, Britain's independent broadcasting watchdog, said in a statement that Press TV failed to obey a rule that its licence should be held by its Tehran headquarters, instead of by its London office as is currently the case.
Press TV had also "indicated it is unwilling and unable" to pay a fine of £100,000 ($156,000, 117,000 euros) imposed in December for showing an interview in 2009 with an imprisoned journalist for a US magazine, Ofcom said.
The Ofcom statement said that under its broadcasting rules, all licence holders -- in this case Press TV's office in London -- must have general editorial control of the channel.
But the watchdog said it was apparent that "editorial control of the channel rested with Press TV International" in Tehran, and that Press TV had ignored a 35-day deadline to transfer the licence there.
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In December, Ofcom said Press TV had also invaded the privacy of Newsweek journalist Maziar Bahari by filming an interview without his consent while he was in detention during protests in Iran in 2009.
It also ruled that its treatment of him was biased.
At the time, Press TV alleged that Britain's royal family had pressured the regulator to take action. Ofcom said there was no political influence.
Press TV said in a text on its website that the decision to revoke its licence was "questionable".
It also said that Ofcom had not given "a valid response" to its letters claiming influence by the royal family and allegations that the watchdog was not independent of Britain's government.
Relations between Britain and Iran have plummeted following November's storming of the British embassy in Tehran, with the British government expelling all Iranian diplomats from London and closing its mission in Iran's capital.