The Home Office reserves the right to deport homosexual Iranians back to their country, the home secretary has said.
In a letter to Lord Roberts of Llandudno, Ms Smith wrote: "We do not accept that we should make the presumption that each and every asylum-seeker who presents themselves as being of a particular nationality or sexuality, regardless of their particular circumstances, should automatically be allowed to remain in the UK.
"With particular regard to Iran, current case law handed down by the Asylum and Immigration Tribunal concludes that the evidence does not show a real risk of discovery of, or adverse action against gay and lesbian people who are discreet about their sexual orientation."
The letter will disappoint asylum and gay rights activists whose hopes concerning Iranian deportations were raised when Ms Smith stepped in to block the removal of Mehdi Kazemi, a gay Iranian teenager, following a concerted campaign to have him stay in the country.
But it now appears the move was not the first step in a government strategy to put a moratorium on future deportations.
Campaigners argue anyone returned to Iran who is homosexual is at automatic risk of discrimination, torture, and even death. Some campaigners claims that up to 4,000 gays and lesbians have been executed in the country since 1979.
In 2005, the regime provoked an international outcry after it executed two men, Mahmoud Asgari and Ayaz Marhoni, for the crime of homosexuality.