Ecuadorian President Rafael Correa has granted WikiLeaks founder Julian Assange asylum, stepping up the diplomatic war between the UK and the  Ecuadorian government.

The announcement follows the UK Government's threat to "storm" the Ecuadorian embassy in London to apprehend Assange.

Assange, who has been holed up in the embassy since June 19, is fighting extradition to Sweden where he faces charges of sexually assaulting two former WikiLeaks volunteers.

"The UK has a legal obligation to extradite Mr Assange to Sweden to face questioning over allegations of sexual offences and we remain determined to fulfil this obligation," a Foreign Office spokesman told Reuters.

"Under British law we can give them a week's notice before entering the premises and the embassy will no longer have diplomatic protection," he added.

Ecuador's foreign minister, Ricardo Patino, told reporters that Britain had sent a letter to the government in Quito, containing "an express threat... that they might storm our Embassy in London."

Although Assange has been granted asylum, if he tries to leave the embassy and fly to Equador he will almost certainly be arrested, effectively trapping him in the London embassy.

The Uk Government's letter, which was delivered through an official of the British embassy in the Ecuadorean capital has now been made public.

It reads: "You [the Ecuadorean government] need to be aware that there is a legal base in the UK, the Diplomatic and Consular Premises Act 1987, that would allow us to take actions in order to arrest Mr Assange in the current premises of the embassy."

"We need to reiterate that we consider the continued use of the diplomatic premises in this way incompatible with the Vienna convention and unsustainable and we have made clear the serious implications that this has for our diplomatic relations."

Though Sweden has not charged Assange, they are going ahead with the investigation. Assange fears that if he is extradited to Sweden, they will send him to the United States where he will be persecuted for publishing thousands of secret diplomatic cables.