Home Secretary Shabana Mahmood has threatened to ban all Eritreans from entering the UK if the east African country's government does not accept more returns of small boat migrants and foreign national offenders.
From Thursday, Eritrean diplomats will face restrictions on their movement outside London. Fast-track visas will also be stopped for VIPs.
Ministers have previously pressured other countries into accepting returns by threatening visa bans.
Eritreans were the most common nationality among small boats migrants in the 12 months to June - accounting for 18% of arrivals, external, according to figures from the House of Commons Library.
The Eritrean embassy in London has been contacted for comment.
"Eritrea has had every chance to accept the return of criminals and those with no right to be in the UK. Unlike other countries, it has refused," said Mahmood.
She said she would not hesitate "to impose further measures on other countries refusing to co-operate".
The UK government accused the Eritrean authorities of "abruptly" withdrawing co-operation earlier this year.
The restrictions mean diplomats are banned from travelling 60km outside London without permission.
The Home Office said this mirrored restrictions on British officials in Eritrea's capital Asmara.
Earlier this year, the UK threatened bans against Angola, Namibia and the Democratic Republic of Congo (DRC).
Restrictions were announced against the DRC last year, but the Home Office said these have been lifted after co-operation on returns improved.
Angola and Namibia both agreed changes before restrictions were introduced.
When announcing changes to the UK's asylum system in November, Mahmood said visa penalties would be applied to countries that failed to co-operate with returns policies.
Penalties included an "emergency brake" on visas for countries with high asylum claims until they take back citizens in the UK illegally.
According to Home Office data, more than 20,400 people have arrived in the UK by small boats so far since the beginning of this year, down 40% from the same period last year.
There were more than 40,600 returns and deportations from the UK from July 2025 to June this year - an 8% increase on the same period last year.
Of those who had been returned, less than 6,000 has been convicted of a criminal offence.