Iran’s treatment of Nazanin Zaghari-Ratcliffe amounts to torture, the British foreign secretary, Dominic Raab, has said, as the Foreign Office downplayed an Iranian state TV report saying Britain would pay a £400m debt to secure her release. Zaghari-Ratcliffe’s husband, Richard Ratcliffe, said the family had “heard nothing” about a deal to secure her release, as hopes were raised by the suggestion that the long-running dispute had been resolved. The Foreign Office said “legal discussions are ongoing” despite the claim made on Iranian state TV on Sunday, which cited an anonymous official. It was being said that the UK government’s position had not changed over the weekend and that Iran had made the claim before without Zaghari-Ratcliffe having been released. On the BBC’s Andrew Marr programme on Sunday, Raab came closer to accepting that Zaghari-Ratcliffe was being held state hostage by the Iranians when he said it was difficult to argue with that characterisation. Raab also for the first time said her fate was now tied to not just a £400m debt that the UK government owes to Iran but also the outcome of talks in Vienna on the future of the 2015 Iran nuclear deal. Ratcliffe has long argued that the Foreign Office should accept she is a state hostage, and that this is a practice carried out by the Iranians on many dual nationals. Iran denies the charge. In practical terms the tougher language from Raab probably does not mean a change in government policy, but it may be seen as a sign that the UK may get more assertive if the talks in Vienna break down. The main points of dispute in Vienna are which sanctions the US is prepared to lift in return for Iran coming back into full compliance with the nuclear deal, the process whereby the Iranians can test and verify whether sanctions have been lifted, and the precise steps the Iranians need to take to satisfy the UN nuclear watchdog, the IAEA, that it is full compliance with the deal. The US is resisting lifting sanctions not related to the deal, such as for human rights abuses or terrorism. Iran says they are merely rebadged nuclear-related sanctions. Raab has said he expects these talks to culminate by the start of June, by which time the Iranian presidential election campaign will be in full swing and the handling of the nuclear talks will be even more politically contested in Iran than it already is now. Zaghari-Ratcliffe is staying at her parent’s home in Tehran while on bail pending an appeal after she was found guilty of acting to undermine the Iranian state by attending a demonstration outside the Iranian embassy in London in 2009. She was first arrested in Iran in 2016 and given a five-year sentence that she has now completed for spying. If she loses her appeal against the new conviction, she is due to face another year in jail and a further 12 months in which she is not allowed to leave the country. There was no evidence produced at her second trial that was not available at her first. Asked if she was being held hostage, Raab told the Marr show: “I think it’s very difficult to argue against that characterisation. It is clear that she is subjected to a cat and mouse game that the Iranians, or certainly part of the Iranian system, engage with and they try to use her for leverage on the UK.” He said her imprisonment was “not solely” about a debt owed by the UK for failing to deliver tanks in Iran in 1979. “We’ve said that debt is something we want to have resolved,” he said. Raab said the wider context of the forthcoming elections in Iran, which will vote in a successor to President Hassan Rouhani, and the talks in Vienna were more significant issues. “Nazanin is held unlawfully, in my view, as a matter of international law. I think she’s being treated in the most abusive, tortuous way. I think it amounts to torture, the way she’s being treated.” He said there was an “obligation on Iran to release her immediately and without condition”. Richard Ratcliffe has always maintained that his wife is being used as a bargaining chip by Tehran in the debt dispute and as leverage in talks over the nuclear deal between Iran and world powers. The Foreign Office now acknowledges that the debt is owed but says there is no connection with her arrest. Another British-Iranian dual national, Anoosheh Ashoori, is also held in jail, and a third British-Iranian was recently put on trial. His identity is being kept secret at the family’s request. Iranian state TV also reported that along with the Zaghari-Ratcliffe deal a prisoner swop involving four Americans and four Iranians was underway in return for the release of $7bn of Iranian assets held overseas in foreign bank accounts. But both US and UK officials separately denied the story, and seemed genuinely perplexed by the reports.