Foreign Secretary David Miliband says that Britain should reopen dialogue with Hizbollah, according to an interview in a Lebanese newspaper.
But the Foreign Office said there was no change in any policy towards Hizbollah and that Mr Miliband's words had been "completely misrepresented".
Beirut newspaper the Daily Star reported that Mr Miliband said he believed "carefully considered contact with Hizbollah's politicians, including its MPs, will best advance our objective of the group rejecting violence to play a constructive role in Lebanese politics.
“We have no illusion about Hizbollah’s [arsenal] but rather than focusing on hurdles, we are focused on the best way to ensure political stability in Lebanon, which is vital to peace in the Middle East.”
He added: “The UK strongly supports a comprehensive peace settlement to the Arab/Israeli conflict and this will need to include an agreement between Israel and Lebanon.”
A Foreign Office spokeswoman said: "This policy is kept under regular review. We are only interested in serious dialogue with Hizbollah about issues of national importance to Lebanon and the region.
"We have no illusions about Hizbollah and have already signalled our firm opposition to Hizbollah's support for terrorism."
In the interview, the Foreign Secretary expressed his concern over Hizbollah’s growing military power, saying he had fears over the impact this would have on Lebanon’s peace and security.
Last year the British government classified the military wing of the group as a terrorist organisation for allegedly plotting the kidnap of British security forces in Iraq.
A spokesman for the Israeli embassy said: “Having received the British government’s clarification of David Miliband’s interview with a Lebanese newspaper, we recognise the British government is holding firm to previous positions.”
“The Israeli government likewise remains wedded to its position that to reward terror in the form of speaking to Hizbollah is never the correct approach.”
Hizbollah has two ministers in the new 30-member unity cabinet which has agreed on a policy statement that recognises Hizbollah’s right to use arms against Israel.
In August a report found that Hizbollah was keeping 40,000 rockets close to the Israeli border, and was training its militia to reach Tel Aviv with its missiles.