Downing Street says the retirement of Cuban leader Fidel Castro is "an opportunity" for the country to make progress towards democracy.
Prime Minister Gordon Brown's spokesman said he hoped it would lead "to more respect for human rights and the release of political prisoners".
"This is now an opportunity to make progress towards a peaceful transition to a pluralist democracy," he said.
Mr Castro says he will not return to the presidency because of ill health.
He handed over power temporarily to his brother, Raul, in July 2006 when he underwent intestinal surgery.
'Spirit of the revolution'
The 81-year-old has ruled Cuba since leading a communist revolution in 1959.
In December, Mr Castro indicated that he might possibly step down in favour of younger leaders, saying "my primary duty is not to cling to any position".
Foreign Secretary David Miliband said: "It is 49 years since the 1959 Revolution, and no-one can doubt the historic role Fidel Castro has played in Cuba's recent history.
"The Cuban people will now be looking to the future, a future which we hope will offer them political progress founded on democracy and human rights, and continued progress based on social justice and individual need."
Ian Gibson, chair of the parliamentary all-party group on Cuba, said he thought Mr Castro's retirement could lead to an opening out of the island's relations with the rest of the world.
"I think the spirit of the revolution will live on in the younger generation of Cubans, but I would certainly think there will be differences in the relationships with other countries," he said.
"Cuba understands that it is a global economy now - I think there will be less fear of America and more interaction with Europe."
Liberal Democrat foreign affairs spokesman Edward Davey said he hoped the international community would encourage the process of democratic reform.
"With Fidel Castro gone, we must hope that Cuba carries out major reforms and joins the democratic world," he said.
"It would be a tragedy if he were succeeded by a family dynasty.
"It is important for the international community, especially America, to encourage reform and hold out the hand of friendship."