Last month, the media regulator was understood to have informed Press TV, the overseas voice of the Iranian government, that it was considering a ban on the network in the UK
This followed a ruling in May that Press TV was guilty of "serious" breaches of broadcasting rules for showing an interview conducted under duress with Maziar Bahari, the journalist arrested while covering the Iranian presidential election in 2009.
However, Ofcom has decided instead to impose a financial penalty of £100,000 on Press TV after receiving final submissions from the Iranian news channel.
The Foreign Office has denied any involvement in Ofcom's sanctions levied against Press TV, despite the situation coming at a time or rising tensions between the UK and Iran.
In its ruling, Ofcom agreed with Bahari that the Press TV interview was conducted under duress, and that he was forced to read from a pre-prepared script.
The watchdog added: "Press TV's filming and broadcast of the interview without Mr Bahari's consent while he was in a sensitive situation and vulnerable state was an unwarranted infringement of Mr Bahari's privacy.
"Because of the serious nature of the breaches, Ofcom took the decision to investigate the possibility of imposing a sanction against the broadcaster."
Press TV must now pay a £100,000 fine to the HM Paymaster General and broadcast a statement of Ofcom's findings in a form to be determined.
In a statement issued to The Guardian, a Foreign Office spokesman insisted that there had been no government interference in Ofcom's decision.
This is despite a growing crisis in relations between the UK and Iran this week following Britain's decision to withdraw its diplomatic staff from its embassy in Tehran after the building was stormed by demonstrators.
"We have been concerned for some time by serious allegations that Press TV has been involved in broadcasting confessions obtained under duress from individuals without access to a fair trial," said a spokesman.
"It is right and proper that these allegations should have been investigated by Ofcom, as the independent regulator of the UK communications industry. Press TV's actions that appear complicit in such human rights violations are unacceptable and reprehensible.
"It is a matter for Ofcom to decide what penalties should be imposed. The government is not part of that decision."