The Foreign Office has played down claims that diplomats have been ordered to restrict their lobbying activities following the row over an Indian steel billionaire.

Officials described revelations that the head of the Foreign Office, Sir Michael Jay, has issued guidelines for senior diplomats as "nothing new" saying they had been issued some time ago.

Staff at embassies abroad have been advised to restrict lobbying of foreign governments to companies that are either UK-based or have substantive interests in Britain.

The Foreign Office rejected claims that the move had come in response to the row involving the Mittal steel deal in Romania.

Number 10 spent weeks untangling itself from allegations that British officials in Romania had lobbied on behalf of an Indian steel magnate because part of his company was based in the UK.

Problems were increased by the fact that Lakshmi Mittal had made a £125,000 donation to the Labour Party just weeks before the lobbying which culminated in a letter of support from the prime minister being sent to the Romanian government.

"The new guidelines simply reflect the multinational nature of global business," said an official. "A company can have interests in many countries and can no longer be considered as being simply British, American or being from any other single country."

Members of the Foreign Affairs select committee are now considering the new guidelines, though exact details are to remain confidential.