WikiLeaks founder Julian Assange, arrested in Britain on Swedish allegations of sex crimes, was granted bail by a London court on Tuesday.

The 39-year-old Australian, the target of U.S. fury over WikiLeaks' publication of part of a trove of 250,000 secret diplomatic cables that have embarrassed Washington, could be freed under strict conditions, Judge Howard Riddle ruled.

Assange, who denies the Swedish allegations, will be electronically tagged, must lodge 200,000 pounds ($317,400) with the court, report to police daily and observe a curfew until a further hearing on Jan 11.

However, Assange's lawyer Geoffrey Robertson told reporters after the hearing that it would take time to gather the security and it was likely Assange would remain in prison on Tuesday evening. The prosecution was given until 5.30 P.M. on Tuesday to return to the court with their decision on whether or not they would appeal.

Riddle ordered that Assange must live at the Suffolk, east of England, home of Vaughan Smith, a former army officer who set up London's Frontline Club, an independent press club.

Assange remained defiant in a statement released by his mother on Tuesday, denouncing the firms that suspended payments to his website as instruments of U.S. foreign policy and calling for help in protecting his work from their illegal and immoral attacks.

My convictions are unfaltering. I remain true to the ideals I have expressed. This circumstance shall not shake them, Assange said, according to a written statement of his comments supplied to Australia's Network Seven by his mother Christine.

We now know that Visa, Mastercard, Paypal and others are instruments of U.S. foreign policy, he said. I am calling for the world to protect my work and my people from these illegal and immoral attacks.

Assange handed himself in to British police last week after Sweden issued a European arrest warrant.

He has rejected the allegations of sexual misconduct by two female Swedish WikiLeaks volunteers and opposes attempts by Swedish authorities to extradite him for questioning.

Internet activists launched Operation Payback last week to avenge WikiLeaks against those perceived to have obstructed its operations, temporarily bringing down the websites of credit card firms Visa and MasterCard, as well as that of the Swedish government.

Assange and his lawyers have voiced fears that U.S. prosecutors may be preparing to indict him for espionage over WikiLeaks' publication of the documents. (Additional reporting by Adrian Croft and Michael Perry; Editing by Noah Barkin)