Allowing Iran to build a nuclear bomb would spark a Middle East arms race, William Hague has warned.
The Foreign Secretary told MPs if the Tehran regime managed to construct a viable weapon, its neighbours would be forced to to build their own nuclear warheads too.
He said: "If Iran set about the development of nuclear weapons then other nations in the Middle East would do so as well. I therefore do believe there would be a nuclear arms race in the region."
Mr Hague accused Iranian President Mahmoud Ahmadinejad of pursuing "confrontational policies" and described the country's enrichment of uranium in defiance of United Nations Security Council resolutions as "a crisis coming steadily down the track".
The Foreign Secretary was speaking in a backbench-led Commons debate where Tory MP John Baron called on MPs to demand the Government rules out using military force against Iran to attack its nuclear sites.
Mr Baron said action would be "counter productive", but Mr Hague said ministers needed to retain all options as they pressured Tehran to scrap its programme. He said ruling out force "would increase tension and increase the likelihood of military conflict in the near term".
Mr Hague added: "It is our assessment and that of our allies that Iran is keeping open the option to develop nuclear weapons and is steadily developing the capability to produce such weapons, should it choose to do."
Mr Baron, a member of the Commons Foreign Affairs Select Committee, earlier called on the West to abandon "sabre rattling" policies over Iran's nuclear ambitions - warning the current debate could be the last chance for Parliament to consider the situation "before possible hostilities begin" in a regional war.
Tensions over Tehran's alleged attempts to develop nuclear weapons have led to Iran halting oil exports to the UK and France in retaliation for European Union sanctions. The regime has also threatened to close the strategically vital Straits of Hormuz.
A cross-party amendment to Mr Baron's motion, supported by heavyweights including former foreign secretaries Sir Malcolm Rifkind and Margaret Beckett as well as former defence secretary Bob Ainsworth, backs the Government's efforts to resolve the crisis which includes keeping "all options" - including the use of force - open.