The plan being considered would possibly redeploy troops being pulled out of Afghanistan and move them to the United Arab Emirates, a British ally sharing a sea border with Iran, government officials told the British newspaper.
"Of course" Britain is looking at contingency planning if the nuclear crisis in Iran worsens, an unidentified official said. "That is why it is sensible to look at what allies we have in the gulf region."
Britain has about 70 servicemen and women in the UAE to service jet fighters flying between Britain and Afghanistan in the war against the Taliban Islamic fundamentalist militant movement.
Britain has about 9,500 troops in Afghanistan, the second-largest foreign force in the country after the United States. It plans to withdraw 500 soldiers by the end of the year and an undetermined number next year, Prime Minister David Cameron has said.
It plans to withdraw the bulk of its soldiers by the end of 2014.
Cameron -- in the UAE capital Abu Dhabi Monday to promote sales of Eurofighter Typhoon multirole combat aircraft -- had no immediate comment on the Telegraph's report.
But he told the BBC his visit's purpose was more than simply to support jet fighter sales.
"We're also partners in defense and security. We worked together in Libya, we worked together in Afghanistan and we'll be discussing all the key regional and global issues," he told the network before his meeting with government leaders.
The UAE's official WAM news agency said Cameron and UAE leaders discussed "ways to strengthen ties of friendship and cooperation between the two friendly countries," as well as to improve regional security.
Cameron told Zayed University students in Abu Dhabi Britain would do "everything" possible to stop Iran from developing nuclear weapons. He said a nuclear Iran would be a "desperately bad development for our world" that could "trigger a nuclear arms race across the whole of the region."
But he said Tehran had a right to peaceful civilian nuclear power. The UAE is also developing a peaceful nuclear energy program to generate electricity. It has signed peaceful nuclear agreements with the United States, France and South Korea and a memorandum of understanding with Britain.
U.S. and European officials say Tehran is working to build nuclear weapons, but Iranian leaders say Tehran is simply developing a peaceful nuclear program to generate electricity without dipping into the oil supply it prefers to sell abroad. The nuclear program would also provide fuel for medical reactors, they say.
In late August international nuclear inspectors reported Iran installed three-quarters of the nuclear centrifuges it needs to complete a deep-underground site for the production of nuclear fuel.