Saudi Arabia has privately accepted one of its coalition planes bombed a funeral hall in Yemen's capital, Sanaa, on Saturday, the BBC has learned.
At least 140 people were killed, most of them civilians, in one of the single worst death tolls in the two-year war.
More than 500 others were injured.
Saudi Arabia has agreed to a British request to participate in the investigation into the attack, which included a second air strike that hit rescuers.
The attack on Saturday was so horrific and of such magnitude that Britain has taken the unusual step of insisting it participate in the investigation now under way.
An official with the UK government said Britain was considering sending a team of lawyers and military investigators to monitor the Saudi-led coalition's own inquiries.
These are being conducted by a 14-nation group known as the Joint Incidents Assessment Team which includes a number of Saudi Arabia's Gulf Arab allies.
Human rights groups have called for an independent probe instead.
Saudi sources said the investigations would include an examination of data recordings, witness statements and available military intelligence.
Saudi intelligence has a number of informants on the ground in Yemen. So officers would have known that the funeral was also being attended by several senior Houthi rebels that Saudi Arabia is fighting, as well as allied tribal leaders.
What is not yet clear is whether the pilot took it on himself to release his bombs or whether he was ordered to do so by someone higher up the command chain.
One Saudi official said there would be no public statement until the investigation was complete, a process which could take days, weeks or even months.
With casualties mounting in Yemen, the UK is under pressure to suspend its lucrative arms sales to Saudi Arabia.
Defence Secretary Sir Michael Fallon has said the government could review those sales if it is found that civilians were knowingly targeted in an air strike.