Rishi Sunak has said the stabbing of Sir Salman Rushdie should be a 'wake-up call' for the West about the threat which Iran still poses.
In the aftermath of the attack on the 75-year-old author, the former chancellor warned attempts to revive the international Iran nuclear deal may have reached a 'dead end'.
The Tory leadership contender also suggested that there could be a case for imposing sanctions on Iran's hardline Islamic Revolutionary Guard Corps (IRGC).
On Saturday, Hadi Matar, from Fairview, New Jersey, entered pleas of not guilty to charges of attempted murder and assault at court in Mayville, New York State.
The 24-year-old was born in the US to parents who emigrated from southern Lebanon - and a review of his social media accounts suggested he was sympathetic to the cause of the IRGC, according to US media reports.
Sir Salman had been living with death threats since 1988 when Iran's then supreme leader Ayatollah Khomeni issued a fatwa denouncing his novel, The Satanic Verses, as blasphemous to Islam.
In 1998, the Iranian government withdrew its support for the death sentence but the fatwa was never fully rescinded and some Iranian media have reportedly welcomed the attack on the writer.
Iranian politician Malek Shariati said it was a 'warning to the killers of Qasem Soleimani', the former head of the country's elite Quds Force, who was taken out by a US drone strike in Baghdad in 2020.
He added: 'If the attack on Salman Rushdie is an operation by Iran, it shows our power. If the attacker has done it under the influence of Iran, it proves the success of our Islamic revolution.'
Sir Salman remains on a hospital ventilator after suffering a damaged liver and severed nerves in his arm in the brutal knife attack on Friday morning. His spokesman said he is likely to lose an eye.
In a statement, Mr Sunak suggested attempts to revive the international nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA) under which Iran was supposed to give up its attempts to develop nuclear weapons in return for the easing of sanctions may be futile.
'A nuclear-armed Iran would pose an existential threat to our ally Israel, and indeed imperil the whole of Europe with ballistic missile capability,' he said.
'We urgently need a new, strengthened deal and much tougher sanctions, and if we can't get results then we have to start asking whether the JCPOA is at a dead end.
'The brutal stabbing of Salman Rushdie should be a wake-up call for the West, and Iran's reaction to the attack strengthens the case for proscribing the IRGC.'
Rushdie's injuries included three stab wounds to the right side of the front of his neck, four stab wounds to his stomach, puncture wounds to his right eye and chest, and a laceration on his right thigh, according to CNN.
Meanwhile, the FBI said it was supporting state police and 'working closely with our international partners in the United Kingdom to provide additional resources, since the victim is a UK-US dual citizen'.