Nasheed, the country’s first democratically elected leader, was sentenced to 13 years imprisonment on controversial terrorism charges last year, but was allowed to travel to Britain in January for spinal cord surgery after he fell ill.
The island nation has been rocked by political turmoil in recent years, seriously denting its reputation as an upmarket tourist destination as current leader Abdulla Yameen rules with an iron fist.
“President Yameen has jailed every opposition leader and cracked down on anyone who dares to oppose or criticise him," Nasheed, 49, said in a statement Monday proclaiming his refugee status.
“In the past year, freedom of the press, expression and assembly have all been lost.
“Given the slide towards authoritarianism in the Maldives, myself and other opposition politicians feel we have no choice but to work from exile—for now."
The Maldives government reacted swiftly, accusing Nasheed—whose legal team includes the high-profile human rights lawyer Amal Clooney—of trying to avoid serving his prison sentence.
“The government of the Maldives is disappointed, if confirmed, that the UK government is allowing itself to be part of this charade, and further, is enabling an individual to circumvent his obligations under the law," it said in a statement.
Last month, President Yameen stripped Nasheed of his pension and medical insurance benefits granted by the constitution to former leaders.
Nasheed’s Maldivian Democratic Party (MDP) said he would continue as their leader and his new status could help focus international attention on the plight of dissidents in the nation of 340,000 Sunni Muslims.
“He will continue to be the leader of the party and give leadership to our work from abroad," MDP youth wing leader Shauna Aminath told AFP by telephone.
Nasheed secured asylum in Britain in 2004 after a crackdown on dissidents by the-then president Maumoon Abdul Gayoom, a half brother of the current incumbent Yameen.
He returned to the Maldives in April 2005 and won the atoll nation’s first democratic presidential elections three years later, toppling Gayoom who had been in power for 30 straight years.
Britain’s interior ministry declined to confirm the former president’s status when contacted by AFP, saying it did not comment on individual cases.
Nasheed was accorded a red carpet welcome and received by Prime Minister David Cameron after arriving in Britain for medical treatment in a deal brokered by the former colonial power along with Sri Lanka and India.
The United Nations has led international criticism of the treatment of Nasheed, who served for four years before he was ousted in what he called a coup backed by the military and police in February 2012.
In 2015 he was sentenced to 13 years in prison on terrorism charges relating to the arrest of an allegedly corrupt judge in 2012, when he was still in power.
The Maldives, best known as an idyllic destination for honeymooners, has instead been in the headlines with a succession of political dramas.
In November, the Maldives parliament approved a state of emergency for 30 days, but lifted the tough laws within a week after saying it had made progress in an investigation into a blast aboard Yameen’s speed boat that wounded his wife and two others on 28 September.
Yameen’s trusted deputy Abdulla Adeeb was later arrested in connection with the blast and remains in custody charged with attempting to assassinate him.
Adeeb’s arrest, which followed his impeachment, was the second sacking of a vice president in just under four months.
Yameen dismissed former vice president Mohamed Jameel after he accused him of trying to topple the government.
And, in April, Maldives police briefly arrested 16 independent journalists while breaking up a demonstration against an alleged crackdown on freedom of speech.