Five British sailors are being held in Iran after the Iranian navy seized their racing yacht, which may have strayed into the country's waters in the Gulf en route from Bahrain to Dubai, Britain's foreign ministry has said.

British diplomats were working on Monday to prevent the incident from escalating further, British media reported.

The foreign ministry in London, which had initially kept the incident secret, said all the sailors were understood to be safe and well and that their families had been informed.

The Kingdom of Bahrain, a yacht owned by Sail Bahrain, was seized on November 25, a day before it was due to take part in the Dubai-Muscat Offshore Sailing Race.

David Miliband, the UK's foreign minister, said: "FCO [foreign ministry] officials immediately contacted the Iranian authorities in London and in Tehran on the evening of 25 November, both to seek clarification and to try and resolve the matter swiftly.

"Our ambassador in Tehran has raised the issue with the Iranian foreign ministry and we have discussed the matter with the Iranian embassy in London.

"I hope this issue will soon be resolved. We will remain in close touch with the Iranian authorities, as well as the families."

The AFP news agency identified the crew on Kingdom of Bahrain as: Oliver Smith, Oliver Young, Sam Usher, Luke Porter and David Bloomer, citing informed sources in London.

British media noted the incident echoes the seizure of 15 British sailors by Iran while sailing in disputed waters in March 2007.

They were released after about two weeks, but only after a tense diplomatic standoff between Iran and the UK.

The Dubai-Muscat 360-nautical mile (667km) race, which first took place in 1992, passes through the Gulf into the Indian Ocean, via the Strait of Hormuz, before arriving in Muscat, the capital of Oman.

Relations between Tehran and the West have deteriorated after the Islamic Republic announced on Sunday that it plans to build another 10 uranium enrichment plants.