Britons should leave the Libyan city of Benghazi immediately in response to a "specific, imminent threat" to Westerners, the Foreign Office says.
The British Embassy in Tripoli has been in contact with a "small number" of British nationals whose details it had.
Germany and the Netherlands have also urged their citizens to leave Benghazi.
But Libya's deputy interior minister Abdullah Massoud insisted the security problems in Benghazi did not warrant such a response.
He told the BBC the Ministry of Foreign Affairs in Libya had not been informed about the change in travel advice for British nationals.
The minister added he would be contacting the Foreign Office for further clarification and insisted such actions added to instability in the region.
'Credible and serious'
The UK Foreign Office has been advising against travel to Benghazi and most parts of Libya since September.
In its updated travel advice, the Foreign Office said that after the recent French military intervention in Mali against Islamic extremists, there was the possibility of retaliatory attacks against Western interests in the region.
There is also the threat of kidnapping in Libya.
A spokesman would not confirm how many Britons it had spoken to but said it was a "small number".
BBC world affairs reporter Richard Galpin understands that there are fewer than 50 British citizens in Benghazi, including teachers and business people.
Foreign Office minister David Lidington told the BBC the government had received "credible, serious and specific" reports about a possible "terrorist threat".
He added: "The terrorist risk in Benghazi and other parts of this region has been there for some time before Mali and the Algeria crisis of last weekend... the safety of British citizens is our top priority."
Mr Lidington would not be drawn on whether the British government would charter flights to Benghazi to evacuate British nationals, but said: "Our advice to people is not to delay, but to leave."
BBC correspondent in Libya Rana Jawad said only "tens" of nationals are registered with the British Embassy.
She said Britons would most likely be using commercial flights to leave the country from Benghazi.
Our correspondent added that Western diplomats had told the BBC the British School in Benghazi had closed on Wednesday and may be closed for the next few weeks.
The German government said on its website that it had been "made aware of a specific, imminent threat to Westerners in Benghazi" and urged "all German citizens to immediately leave the city and region of Benghazi".
Thijs van Son, a spokesman for the Dutch foreign ministry, told the Associated Press news agency that travel warnings for Benghazi had been upgraded as the ministry had "reason to believe there was a serious threat".
Prime Minister David Cameron's spokesman said the UK continued to provide assistance and support to the Libyan government to reform and restructure its forces and strengthen democratic institutions.
Air Malta cancelled all flights to Benghazi due to leave on Thursday, and will review in the coming days whether flights planned for next Tuesday should go ahead.
On 11 September, US ambassador Chris Stevens and three other Americans died during an attack on the US consulate in Benghazi.
The ambassador died of smoke inhalation when he was trapped inside as the building burned, after armed men had attacked the compound.
Britain has not had a diplomatic presence in Benghazi - Libya's second largest city - since the attack.
Benghazi was the stronghold of the National Transitional Council, the rebel group whose revolt eventually ended Col Muammar Gaddafi's hold on power in Libya.
Last week, in neighbouring Algeria, militants took over a gas plant, taking hundreds hostage and claiming they were acting in revenge for events in Mali.
It is thought 37 foreigners - including six UK nationals - died during the four-day siege, which ended after Algerian special forces stormed the compound.
Professor George Joffe, an expert in North African affairs at Cambridge University, said there had long been an extremist element in eastern Libya which has been "unwilling to accept a democratic outcome" to the civil war in Libya.
He said that, while the militants in Libya may share a "common ideology" with Islamic rebels in Mali and Algeria, it was not likely they shared any organisational links.
"What we are seeing is a sympathetic response to what occurred in Algeria and Mali, and therefore a threat to Westerners. I am not even certain that the threat is specific to Britain," Prof Joffe added.