Theresa May is under pressure to suspend arms sales to Saudi Arabia after the Gulf kingdom admitted that dissident journalist Jamal Khashoggi was killed at its Istanbul consulate.
Saudi state television reported on Friday night that a primary investigation into the Washington Post columnist's disappearance found he died after a fight broke out in the consulate in Turkey.
But the explanation about Mr Khashoggi's death has been met with widespread scepticism and the Prime Minister has been urged to now put arms trading with the kingdom on ice.
Saudi Arabia is the UK's key ally in the region and also a significant trading partner.
Britain rolled out the red carpet for Crown Prince Mohammed bin Salman in March.
During his state visit he was granted rare access to a briefing on foreign policy issues by national security officials alongside his meetings with the Queen and Mrs May.
Foreign Secretary Jeremy Hunt is considering the "next steps" in Britain's response to the case, officials said.
Mr Hunt has previously warned there will be "consequences" for the UK's relationship with Saudi Arabia if it was found the journalist was murdered.
Shadow international trade secretary Barry Gardiner told BBC Radio 4's Today programme: "What we would do certainly at the moment, and I think the Government should do this, is to suspend all arms sales to the kingdom."
Mr Gardiner acknowledged there were a "lot of jobs" in the UK linked to the defence trade but said "this is about who we are as a country".
"We have a thriving defence industry and, of course, this would be a hit to that industry," he added.
Liberal Democrat leader Sir Vince Cable said the case gets "murkier and murkier".
He added: "The Government should have already suspended arms export licences to Saudi Arabia given the outrages in Yemen. This reinforces the argument for loosening the bonds to the regime."
US President Donald Trump said he found the Saudi explanation credible and it was a "very important first step".
A number of Saudi nationals have been arrested and deputy intelligence chief Ahmad al-Assiri and Saud al-Qahtani, a senior aide to the Crown Prince, have been dismissed, state TV reported.
Turkish government sources have alleged that Mr Khashoggi, a critic of the prince and the Saudi government, was tortured and murdered by a hit squad flown in from Riyadh.
The Saudis first dismissed the claims as baseless, without providing an explanation as to how he disappeared after entering the consulate on October 2.
Members of the suspected hit squad reportedly came to Britain during the prince's state visit.
At least three of the suspects – First Lieutenant Dhaar Ghalib Dhaar Al-Harbi, Sergeant Major Walid Abdullah Al-Shihri and Abdul Aziz Muhammad Musa Al-Hawsawi -were part of his entourage, the news site Middle East Eye reported.
Another suspect, Major General Mahir Abdul Aziz Muhammad Mutrib, was seen emerging from a car in Downing Street during the visit, according to the Daily Mail.
A Foreign Office spokesman said: "We send our condolences to Jamal Khashoggi's family after this confirmation of his death.
"We are considering the Saudi report and our next steps.
"As the Foreign Secretary has said, this was a terrible act and those responsible must be held to account."