Lord Lamont, UK trade envoy to Iran, says the US is encouraging "discontent" among Iranians hoping it will lead to regime change.
Lord Lamont said the sanctions were aimed at bringing regime change in Iran by encouraging "discontent" among Iranian people.
He said claims by US secretary of state Mike Pompeo that the measures would not hit ordinary Iranians were a "complete nonsense".
Talking to Sky's Ian King Live programme, he said: "It has already caused a huge fall in the value of the rial - 70% down since the beginning of the year - which has put up the price of basic foods and is hitting ordinary people extremely hard.
"This is actually what America is trying to do - to encourage discontent that they hope will be taken out on the Iranian government and lead to a change in regime there."
The US measures were imposed on Monday after Donald Trump's administration pulled out of the Iran nuclear deal earlier this year.
But they were opposed by other signatories to the 2015 nuclear deal - Britain, France, Russia, China, Germany and the EU.
Worst-affected are Iran's important oil, shipping and banking sectors and thousands of Iranians reacted with protests in Tehran, some shouting "death to America".
Lord Lamont said a major concern was whether humanitarian supplies could reach the Iranian people, despite the US saying these would be allowed.
He said: "The UK is trying to make sure that, for example, humanitarian goods can get through to Iran, things like medical supplies, pharmaceuticals.
"The US maintains it will do that but actually I think it's speaking slightly with a forked tongue because, although they will sometimes allow pharmaceuticals to get through and not be subject to American sanctions, the banks will not finance such trade and will not process payments.
"Without a bank, even pharmaceuticals and medical supplies cannot get through to Iran."
Lord Lamont said that Mr Trump's actions were motivated by rivalry with previous president Barack Obama, under whom the 2015 nuclear deal was signed.
He said: "I think what motivates him is that this agreement was signed by president Obama and, therefore, it's bad.
"Here we have a situation where an agreement designed to stop Iran acquiring nuclear weapons has been complied with by Iran, an agreement struck in good faith, and it's been torn up by one party.
"I think - and I'm echoing the (UK) government's position - this agreement was worth having, it's very important at preventing nuclear proliferation and, of course, if you want Iran to negotiate, to behave reasonably, you're not going to do that by tearing up agreements that are made in good faith."