Argentina has threatened oil firms seeking to operate off the Falkland Islands with 15-year jail terms, huge fines and confiscation of assets in a fresh salvo in the dispute with Britain over sovereignty.
Its London embassy announced that new laws have been passed by the Argentine Congress to punish exploration it claims is in breach of a United Nations resolution.
But the Foreign Office insisted the activities were "wholly legitimate and legal" and entirely under the control of the Government of the island - a British overseas territory..
Islanders voted by 1,513 to three to remain a British overseas territory in a referendum in March but Argentina has since stepped up its claim over the territory at the United Nations.
Buenos Aires has issued repeated written legal warnings to firms that they face administrative, civil and criminal action for operating off the islands - which Argentina calls Las Malvinas.
In a statement, the embassy said the new law " provides for prison sentences for the duration of up to 15 years; fines equivalent to the value of 1.5 million barrels of oil; the banning of individuals and companies from operating in Argentina; and the confiscation of equipment and any hydrocarbons that would have been illegally extracted.
"The Argentine Government has protested against and rejected all of the United Kingdom's attempts to promote and authorize such hydrocarbon exploration and exploitation activities in the area of the Argentine continental shelf." it said.
"These attempts are manifestly contrary to Resolution 31/49 of the United Nations General Assembly, which requires the UK and Argentina to refrain from taking decisions that would imply introducing unilateral modifications into the situation of the Malvinas Islands while the sovereignty dispute between the two countries is still pending."
A Foreign Office spokesman said: "Hydrocarbons activities by any company operating on the continental shelf of the Falkland Islands are regulated by legislation of the Falkland Islands Government, in strict accordance with the United Nations Convention of the Law of the Sea.
"As such these activities are wholly legitimate and legal.
"The UK Government unequivocally supports the right of the Falkland Islanders to develop their natural resources for their own economic benefit.
"This right is an integral part of their right of self-determination, which is expressly contained in the International Covenant on Civil and Political Rights.
"Argentine domestic law does not apply to the Falkland Islands or South Georgia and the South Sandwich Islands, which are UK overseas territories."