Reuters-Nov 2 Trade is growing between Britain and Iran and the government is working to resolve banking sector concerns which are limiting its further expansion, British trade minister Liam Fox said on Wednesday.

Despite the removal of international banking restrictions in January, Tehran has secured ties with only a limited number of smaller banks as U.S. sanctions remain in force and large foreign institutions still fear potential fines.

"Slowly but with increasing enthusiasm, British companies are starting to do business with Iran again ... we are seeing the first signs of growing trade between the UK and Iran," Fox told a City and Financial Global conference.

"The banking sector's ongoing concerns about facilitating payments or providing financial services means that the benefits of sanctions relief are not yet being fully realised, resolving these problems remains a priority for this government." (Reporting by Kylie MacLellan and Jonathan Saul, editing by Elizabeth Piper)